Costco Sees Unusual Bearish Options Flow as Two ITM Put Contracts Attract Over $1M in Premium

By TrendSpider Editor

Costco Wholesale Corporation is drawing attention in the options market today after two identical in-the-money put contracts at the $1,120 strike generated a combined $1,049,184 in total premium. With COST shares currently trading at $953.67, down 0.77% on the session, the positioning stands out as

Costco Sees Unusual Bearish Options Flow as Two ITM Put Contracts Attract Over $1M in Premium

Costco Wholesale Corporation is drawing attention in the options market today after two identical in-the-money put contracts at the $1,120 strike generated a combined $1,049,184 in total premium. With COST shares currently trading at $953.67, down 0.77% on the session, the positioning stands out as notably bearish given that the contracts are already deep in the money. The stock is sitting closer to the lower end of its 52-week range of $844.06 to $1,096.50, adding further context to the downside sentiment being expressed through today's flow.

Key Drivers of the COST Stock Move

• Main Catalyst: Two unusual put contracts were flagged today, both targeting the $1,120 strike with a March 19, 2027 expiration. Each block of 30 contracts carried open interest readings at 600% of normal levels, signaling a significant and deliberate positioning move rather than routine hedging activity.
• Bull Case: The $1,120 strike is well above the current price of $953.67, meaning these puts could represent a large holder hedging an existing long position against further downside risk rather than a purely speculative bearish bet. The contracts do not expire until March 2027, giving the underlying stock ample time to recover toward the 52-week high of $1,096.50.
• Bear Case: With COST already trading roughly $143 below the $1,120 strike and the stock down 0.77% today, these deep in-the-money puts suggest that at least one sophisticated market participant sees continued weakness ahead. The stock has already retreated meaningfully from its 52-week high, and the scale of premium deployed, over $1 million across just two contracts, points to a high-conviction directional view.

The forward setup for Costco merits close attention. The stock has spent recent months consolidating well below its 52-week peak of $1,096.50, and today's options activity adds a layer of institutional caution to that technical backdrop. The March 2027 expiration window is long enough to span the next several earnings cycles and any major macroeconomic developments, suggesting the trader behind this flow is not reacting to a single near-term catalyst but rather expressing a broader thesis on where COST may be headed over the coming six to seven months. Investors will want to watch whether additional bearish flow follows or whether today's activity proves to be an isolated hedge.

COST Unusual Options Activity

Two unusual put contracts were reported on COST today, both sharing identical structure and separated only by a marginal difference in premium:

• Contract 1: PUT, $1,120 strike, expiring March 19, 2027 | Size: 30 | Open Interest: 600% | Status: In the Money | Premium: $526,500
• Contract 2: PUT, $1,120 strike, expiring March 19, 2027 | Size: 30 | Open Interest: 600% | Status: In the Money | Premium: $522,684

Combined, the two contracts account for $1,049,184 in total premium and represent a total of 60 contracts at the same deep in-the-money strike. The 600% open interest reading on both contracts is the most telling detail, indicating that the volume executed today dwarfs the existing open interest at that strike by a factor of six, a hallmark of unusual and intentional institutional flow.

COST Seasonality

Historically, the late summer and early fall period can be a transitional stretch for retail-oriented names like Costco as back-to-school spending gives way to holiday inventory preparation. Options flow initiated in mid-August with a March 2027 expiration would capture the entirety of the upcoming holiday season and the subsequent earnings reports that follow.

COST Relative Performance

COST is currently trading at $953.67, representing a decline of 0.77% on the session and positioning the stock roughly 13% below its 52-week high of $1,096.50. While the stock remains well above its 52-week low of $844.06, today's modest pullback combined with the unusual bearish options activity suggests the stock may be facing incremental selling pressure relative to the broader market on this Monday session.