COST September 2026 Options Begin Trading

Analysis of Costco Wholesale Corp (COST) options reveals potential strategies for investors; selling a $1000 put offers a discounted entry point with a possible 9.17% return if the contract expires worthless (64% probability), while a covered call strategy at the $1100 strike could yield an 18.85% total return if the stock is called away, with a 49% chance of the contract expiring worthless and providing a 9.91% premium boost. Implied volatility for the put and call options are 27% and 26% respectively, compared to a trailing twelve month volatility of 22%.

Analysis

The article details two specific option strategies for Costco Wholesale Corp (COST), currently trading at $1009.73 per share. Selling the $1000 strike put contract, with a bid of $91.65, offers investors a potential entry point at an effective cost basis of $908.35, representing a discount from the current market price. There is a 64% assessed probability of this out-of-the-money put (approximately 1% below current price) expiring worthless, which would yield a 9.17% return on the cash commitment, or 6.93% annualized. Alternatively, for investors holding or acquiring COST shares, selling the $1100 strike call contract at a $100.10 bid as a covered call could generate a total return of 18.85% if the stock is called away at the September 2026 expiration. This strike is approximately 9% above the current price, and there's a 49% chance of it expiring worthless, allowing the investor to retain the shares and the 9.91% premium (7.49% annualized). Notably, the implied volatilities for these put (27%) and call (26%) options are elevated compared to Costco's trailing twelve-month actual volatility of 22%, suggesting option premiums may be relatively rich, which generally favors option sellers.

Key Decisions for Investors

• Investors interested in acquiring COST shares at a potential discount to the current market price of $1009.73 could consider selling the $1000 strike put, targeting an effective cost basis of $908.35 or a 9.17% return if the option expires worthless.
• Existing COST shareholders or those purchasing shares and seeking to generate income while accepting a cap on potential upside could evaluate writing the $1100 strike covered call, aiming for an 18.85% total return if called by September 2026 or a 9.91% premium if it expires worthless.
• Given that implied volatilities of 26-27% are currently higher than the stock's 22% historical volatility, strategies involving selling options on COST may presently offer comparatively attractive premium collection opportunities.