Scott Bauer's Costco Trade

Speaking on Bloomberg Markets, Scott Bauer, a senior market strategist at Trading Advantage, spoke about a bullish options strategy in Costco Wholesale Corporation COST.

He sees $150 as a support and he thinks that it's going to hold in the short term because the stock usually moves gradually higher into the earnings. The company is going to report earnings on September 29 and Bauer believes the best strategy ahead of earnings would be to sell the September 23, 150 strike put and buy the September 30, 157.50 strike call for even money.

If Costco closes the week above $150, the put is going to expire worthless and Bauer is going to make money if the stock jumps above $157.50 after the earnings report.