Consumer Cyclical
COST
Costco Wholesale Corporation
Conservative income from Costco (COST) with covered calls and cash secured puts. Premium retailer with loyal membership base.
Monthly Premium0.8-1.5%
Annualized Return10-18%
Stock Price$880-960
IV RankLow (20-35)
Options LiquidityGood
Dividend Yield0.5%
Why COST for Covered Calls & Cash Secured Puts?
COST has loyal membership base providing stable recurring revenue. Premium quality company with consistent growth. Low volatility.
Example Covered Call Trade
COSTCovered Call
Strike Price$960 (4% OTM)
Expiration30 days
Premium$10.00 per share
Return If Flat1.1% ($1,000)
Return If Called5.0% ($4,600)
Keep Probability75% keep shares
Recommended Strategy for COST
Ultra-conservative calls 3-5% OTM. Only for large accounts wanting stability.
Risks to Consider
- Very expensive (~$90K for 100)
- Low premium
- High valuation
- Membership fee increases
Analyze COST Covered Calls Now
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