Alphabet (GOOG) Options Signal Bullish Bias: Target $340 Calls as AI Momentum Drives Volatility Play

• GOOG surges 1.08% to $317.86, trading above 30D support/resistance at $284.99.
• Options data shows 0.74 put/call OI ratio, with heavy call interest at $340 and $345 strikes.
• Block trades in deep-out-of-the-money calls hint at institutional bullishness ahead of Friday’s expiry.

Here’s the takeaway: Alphabet’s options market is pricing in a strong upside bias, with technicals and news aligning for a breakout above $318.70. But watch for regulatory risks that could trigger a pullback.

The OI Heatmap: Calls at $340 Are the New Battleground

Let’s break down the options data. This Friday’s chain shows 17,913 open contracts at the $340 call—the highest OI of any strike. That’s not just noise. It means a lot of traders are betting on a sharp move above $318.70 (today’s high) before expiration. The next big call is $345 (7,405 OI), but the $340 strike is the immediate focal point.

On the put side, 10,254 OI at $285 suggests some hedging activity. But the put/call ratio of 0.74 tells us calls dominate. That’s classic bullish sentiment. And don’t ignore the block trades: A recent 800-lot purchase of the GOOG20250919C245 call (expiring Sept 19) shows big players are locking in long-term exposure. These moves aren’t random—they’re strategic.

News Flow: AI Wins Outweigh Regulatory Headwinds for Now

The recent news cycle is a mixed bag. Pivotal Research hiking the price target to $400 and the Pentagon AI contract are clear tailwinds. But the EU’s antitrust probe into Gemini could slow momentum. Here’s the catch: options traders are pricing in the positives while discounting the risks. Why? Because Alphabet’s cash flow and cloud growth are too strong to ignore right now. The $23 billion Microsoft AI investment is a threat, but it also validates the sector’s value—GOOG’s AI bets are still the gold standard for many investors.

Trade Ideas: Go Long on $340 Calls, But Hedge with Puts

For options traders: Buy the GOOG20251212C340 call (expiring this Friday) if the price breaks above $318.70. The RSI at 69.78 suggests overbought conditions, but the MACD histogram (-0.22) isn’t bearish enough to kill the move. Target a 5–7% gain if the stock hits $340 by Friday. For a safer play, sell the GOOG20251219C345 call (next Friday’s expiry) if the $340 strike gets tested but fails to hold.

Stock traders: Enter long near $318.70 if the 200D MA ($207.16) continues to act as a floor. A break above $318.70 could target the Bollinger Upper Band at $336.79. But if the price dips below $312.62 (today’s low), consider buying the GOOG20251219P295 put to hedge downside risk.

Volatility on the Horizon: Balance Bullish Bets with Caution

Alphabet’s story isn’t all smooth sailing. The EU probe and Trump’s AI regulatory push could force a pullback. But for now, the options market and technicals are in sync. The $340 call is your best bet for a short-term win, but keep an eye on the $295 put as a safety net. This is a high-conviction trade—position yourself to ride the AI hype, but don’t ignore the risks. After all, even the smartest algorithms can’t predict a regulatory slap on the wrist.