Costco Options Trade, A $13.80 Structure Against a 46x Valuation

Costco’s Valuation Meets a Lower-Cost Options Structure

Costco investors face a clean tension: a highly priced stock can still attract upside interest when an options structure sharply reduces the initial cash commitment. On 2026-11-06, CNBC published Mike Khouw’s analysis of Costco’s valuation and a January call spread built from the 1,060 and 1,090 strike prices.

The investment case is not that Costco suddenly became inexpensive. It is that the proposed structure offers exposure between two strikes for less cash than buying the lower-strike call alone. That distinction matters because lower entry cost does not answer the more important questions: where Costco trades later and whether the spread becomes profitable.

Three Points From Mike Khouw’s Costco Analysis

• CNBC reported Costco at roughly 46x forward earnings at Thursday’s close, compared with a stated average forward multiple above 49x.
• Costco closed above $1,065 per share on Thursday, making the stock’s absolute price an important part of the trade construction.
• The January 1,060-1,090 call spread cost $13.80 per share, or $1,380 for one lot, according to the analysis.

Why Costco’s Share Price Changes the Access Question

Costco’s valuation has two separate dimensions. The first is the earnings multiple: CNBC placed the shares at roughly 46x forward earnings at Thursday’s close. The second is the dollar price: Costco finished Thursday above $1,065 per share.

Those figures frame the trade differently. The multiple describes how much investors are paying relative to forward earnings, while the share price determines the cash required for direct ownership. Options can reduce the initial outlay associated with exposure to the stock, though they also replace straightforward share ownership with strike-dependent exposure.

Mike Khouw captured the valuation tension directly: “Costco isn't cheap, but then it is never cheap.” The useful part of that observation is not an assurance that the premium will persist. It is a warning that a high multiple, by itself, does not establish when the valuation will contract or whether the stock will continue higher.

The comparison with Costco’s stated average forward multiple also needs restraint. A current multiple of roughly 46x sits below the cited average of more than 49x, though the methodology and time span behind that average were not provided. The gap therefore supplies context, not a complete valuation verdict.

Inside the January 1,060-1,090 Costco Call Spread

A call spread combines a purchased call at one strike with a sold call at a higher strike. In the transaction Mike Khouw described, the January 1,060 call provides upside participation above its $1,060 strike price, while the January 1,090 call is sold to reduce the net cost.

CNBC priced Costco’s January 1,060 calls at about $53.45 per share, equivalent to $5,345 for exposure tied to shares above the $1,060 strike. The January 1,090 calls were priced at $39.65 per share.

Subtracting the value received from the higher-strike call produces the reported net cost of $13.80 per share. That brought the one-lot outlay to $1,380, equal to just under 1.3% of Costco’s current stock price at Thursday’s close.

The lower cost comes with a clear trade-off. Selling the January 1,090 call limits the spread’s participation beyond the higher strike. The structure therefore expresses a bounded view: exposure begins around the lower strike, while the sold call exchanges further participation for a smaller initial debit.

The choice of the upper strike also reflects the price reference in the analysis. Costco traded at about $1,090 per share in mid-May. That prior level may matter to traders considering where the shares could pause, though the supplied facts do not establish that it will constrain the stock again.

What the $13.80 Cost Does—and Does Not—Solve

The spread changes the financing of the idea, not the uncertainty surrounding it. Its $13.80-per-share cost is far below the $53.45-per-share price of the January 1,060 call because the investor gives up participation beyond the January 1,090 strike through the sold call.

Measured another way, the $1,380 one-lot spread cost was described as 30% more than the cost of a single Costco share. That comparison highlights the structure’s leverage to exposure between the strikes without implying that the trade has the same economics as owning shares.

Direct ownership has no upper strike embedded in it. The call spread does. The spread also depends on Costco’s future share price relative to both strikes, whereas a shareholder simply continues to own the stock. A smaller initial outlay should therefore be read as a different risk structure, not evidence that the position is inherently inexpensive.

Costco Trade Beneficiaries and Constraints

• Potential beneficiary — Costco upside exposure: The January 1,060 call supplies participation above the lower strike, and selling the January 1,090 call reduces the reported net cost to $13.80 per share.
• Constraint — participation above the upper strike: The sold January 1,090 call limits the spread’s exposure beyond that level in exchange for the premium used to lower the entry cost.
• Valuation risk: Costco traded at roughly 46x forward earnings at Thursday’s close. Being below the stated average of more than 49x does not establish that the shares are undervalued.
• Outcome risk: The available facts do not show whether Costco will reach or exceed either strike or whether the January call spread will be profitable.

Risk Checks for the January Costco Position

• Watch the lower strike: Costco’s position relative to the $1,060 strike determines whether the purchased January call provides the intended upside participation.
• Watch the upper strike: Costco’s position relative to $1,090 determines when the sold call becomes the defining constraint on further participation.
• Keep price and valuation separate: Thursday’s close above $1,065 per share and the roughly 46x forward-earnings multiple answer different questions about cash commitment and valuation.
• Account for the disclosure: Tidal owns or holds all securities mentioned in the CNBC article, a relevant consideration when assessing Mike Khouw’s analysis.

Bottom Line for Costco Investors

Mike Khouw’s January 1,060-1,090 call spread makes a high-dollar Costco position more accessible by reducing the reported net cost to $13.80 per share, or $1,380 for one lot. The appeal lies in that defined exposure and lower initial debit; the risk lies in a roughly 46x forward-earnings valuation, the upper strike’s limit on participation, and the unknown path of Costco’s share price. The next concrete checks are the stock’s position against $1,060 and $1,090 and whether the valuation evidence becomes more complete than the presently cited comparison with an average above 49x.

This article was independently written by OneDayTrading from public reporting. Read the original (CNBC)