Costco's Options Signal Bullish Bias: Key Strikes and Block Trades Point to Strategic Entry Zones

• Costco (COST) trades at $913.59, up 0.59% with volume surging past 1 million shares.
• Options market shows heavy call open interest at $920 and $917.50, while puts dominate at $850 and $870.
• A massive 80-lot block trade sold puts at $942.50 ahead of Sept expiration hints at institutional confidence in downside support.

Look at Costco’s options chain today, and you’ll see a stock teetering between short-term optimism and long-term caution. The technicals show a 0.59% intraday gain with RSI at 42.25—still oversold territory—but the put/call open interest ratio of 0.878 suggests bulls are gaining ground. Here’s what traders need to know: this stock is primed for a directional move, and the options market is giving us a roadmap.

Bullish Pressure at $920, Bearish Caution Below $850

The options market is a chessboard of expectations. Right now, the top OTM calls expiring this Friday are clustered between $915 and $925, with 1,431 contracts open at the $920 strike. That’s not just noise—it’s a magnet for price. If COST breaks above its 30D support/resistance zone (922.43–923.60), those calls could ignite.

On the flip side, puts are hoarding at extreme strikes: 1,397 contracts at $850 and 1,384 at $870. While that might look bearish, context matters. The 200D moving average sits at $965.85, and the lower Bollinger Band is at $881.87. Those puts are more about hedging extreme scenarios than signaling a near-term collapse.

Don’t ignore the block trade either: 80 lots sold at COST20250926P942.5. This Sept-expiring put sold for $942.50 implies big players see a floor around $940–$945. If the stock dips toward that level, it could trigger a bounce… or a test of the lower Bollinger Band.

No News, But Sentiment Is Still Shifting

There’s no recent headlines to sway sentiment, which means technical flow and positioning are in charge. The lack of news isn’t neutral—it’s a vacuum where options activity fills the gap. The heavy call interest at $920 aligns with the 30D SMA ($919.11), creating a psychological threshold. Break that, and the 100D SMA ($941.85) becomes the next target.

Actionable Trades for Today: Calls, Puts, and Precision Entries

For options traders:

• This Friday: Buy COST20251128C920 (strike $920) if COST closes above $914.20. Target $930–$935 before expiry.
• Next Friday: Buy COST20251205P800 (strike $800) as insurance if volatility spikes. It’s the most liquid put with 2,152 OI.

For stock players:

• Bull case: Enter near $903 (intraday low) with a tight stop below $895. Target $922.43 (30D S/R) first, then $939.53 (200D S/R).
• Bear case: Wait for a rejection at $923.60 before shorting, with a hard stop above $930.

Volatility on the Horizon

Costco isn’t screaming for a breakout, but it’s not hiding either. The short-term RSI (42.25) suggests oversold conditions could reverse higher if buyers hold the $903 level. The long-term MACD (-9.27) still points to a bearish trend, but the options market is pricing in a near-term rally.

Here’s the takeaway: trade the immediate bias (bullish) with caution for the longer-term trend. Use the $920 calls as a leveraged play, but keep that $800 put as a hedge. In a market this tight, patience and precise entries will separate winners from the noise.