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Why COST Is an Excellent Covered Call Candidate Right Now Strong · 78/100
Costco Wholesale Corp (Consumer Defensive) · $935.68 ·
Analysis generated Oct 7, 2026 ·
Data as of market close Oct 7
Quick Take
COST is trading at $935.68 with RSI at 58 (neutral territory). Options IV is at 21% — 47% below its 30-day average of 40%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
58
IV Today
21.0%
IV vs 30d Avg
-47%
MACD
bullish
ADX
12
MFI
59
The Setup
COST Covered Call
LONG STOCK
100 shares @ $935.68
SHORT CALL
$1010 Dec '26 · $20.48/sh
Net Cost
$91,520
Max Profit
+$9,480
Break-even
$915.20
Projected P&L at Target
+$9,480
(10.4%)
P&L at Expiry
P&L Scenarios
What happens at different COST prices by expiry:
| COST Price | Today | Oct 31 | Nov 24 | Dec 18 (exp) |
|---|---|---|---|---|
| $749 (-20%) | -$16,691 | -$16,669 | -$16,666 | -$16,666 |
| $795 (-15%) | -$12,095 | -$12,011 | -$11,987 | -$11,987 |
| $842 (-10%) | -$7,666 | -$7,434 | -$7,318 | -$7,309 |
| $889 (-5%) | -$3,569 | -$3,092 | -$2,720 | -$2,630 |
| $917 (-2%) | -$1,353 | -$704 | -$86 | +$177 |
| $936 (0%) ← now | -$0 | +$758 | +$1,561 | +$2,048 |
| $954 (+2%) | +$1,242 | +$2,100 | +$3,081 | +$3,919 |
| $982 (+5%) | +$2,889 | +$3,857 | +$5,052 | +$6,726 |
| $1010 (+8%) ← target | +$4,246 | +$5,270 | +$6,562 | +$9,480 |
| $1029 (+10%) | +$5,045 | +$6,075 | +$7,361 | +$9,480 |
| $1076 (+15%) | +$6,525 | +$7,470 | +$8,543 | +$9,480 |
| $1123 (+20%) | +$7,462 | +$8,243 | +$9,005 | +$9,480 |
Why This Strategy, Why Now
- RSI at 58 — neutral-bullish
- IV -47% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 12 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
Key Risks
COST has bullish momentum (MACD). If a positive catalyst emerges (earnings beat, product launch), the stock could gap past your strike. Consider rolling the call up if COST approaches the strike before expiry.