Amid the broader retail bloodbath on Wednesday, shares of Costco Wholesale Corporation (NASDAQ:COST) tanked more than 12% in their worst performance since 2003.
On CNBC’s “Options Action,” Tony Zhang said the stock traded almost 5 times its average daily put on Wednesday.
Check out other retail stocks making big moves in the premarket.
A trader purchased 800 of the June 370/350 put spreads at $1.90 per contract on average, Zhang stated.
The trader “is betting that this carnage is not over” and is risking about $150,000 in premium on the expectation of Costco Wholesale’s stock declining by as much as 18% by June expiration, he added.
