AVGO Options Signal $350–$380 Battle: How to Trade the AI Giant’s Volatility Play

• Broadcom (AVGO) trades at $340.24, clinging to a 0.13% gain amid a short-term bearish trend and long-term rangebound pattern.
• Options market shows heavy call open interest at $350–$380 and puts at $300–$330, with a near-even put/call ratio (0.98) hinting at balanced bullish/bearish bets.
• RSI at 37.5 (oversold) and Bollinger Bands suggest a potential rebound from the lower band ($326.39) but warn of lingering downside risks.

Here’s the core insight: AVGO is teetering at a crossroads. The stock’s 16.4% drop in three days has sparked a surge in options activity, with traders eyeing a $350–$380 price war. The question isn’t whether volatility is coming—it’s whether you’ll position for a rebound or hedge against a breakdown.

The Options Imbalance: Bulls and Bears in a Stalemate

Let’s break down the OTM options. This Friday’s call options show heavy open interest at $350 (16,103 contracts), $370 (19,056), and $380 (14,254), while puts dominate at $300 (14,216) and $310 (13,089). The next Friday’s chain mirrors this pattern, with calls at $360–$400 and puts at $310–$330.

This isn’t just noise. The call-heavy skew above $350 suggests institutional players are hedging for a rebound toward analysts’ $455 price target. But the puts below $300? That’s a bearish signal—traders are bracing for a potential 12% drop from current levels. The near-1.0 put/call ratio means both sides are equally active, creating a tug-of-war scenario.

The News Angle: AI Margins vs. Analyst Optimism

Broadcom’s Q4 results were a mixed bag. Yes, AI revenue hit $6.5B (up 74% YoY), but gross margins took a hit, sparking a 17% selloff. The market’s fixated on whether AI demand is a fad or a fundamental shift.

Here’s the twist: Analysts still rate AVGO as a Strong Buy, with a $455 average target. That disconnect between earnings and sentiment is key. If the stock tests support at $339.81 (30D level) and holds, the news could fuel a rebound. But if it breaks below the 200D MA ($280.67), the bear case gets a lot louder.

Actionable Trade Ideas: Calls, Puts, and Precision Entries

For options traders, the most attractive setup is a bull call spread using AVGO20251219C350 and AVGO20251219C380. Why? The $350 strike is a liquidity hotspot (16,103 OI), and the $380 strike acts as a ceiling for near-term bullish bets. If AVGO closes above $350 by Friday, the spread could capture a 7–10% move.

Stock traders, meanwhile, should consider entries near $339.81 (30D support) with a tight stop just below $335.06 (intraday low). A break above $343.63 (200D resistance) would validate the short-term rebound. For downside protection, a bear put spread with AVGO20251219P330 and AVGO20251219P300 offers a defined risk play if the stock slips below $330.

Volatility on the Horizon: What to Watch

The next 72 hours will be critical. If AVGO holds above $335, the RSI’s oversold reading (37.5) and Bollinger Band positioning suggest a bounce toward $347–$350 is likely. But a breakdown below $330 would force a reevaluation of the long-term bull case.

Bottom line: This isn’t a binary bet. The options market is pricing in a $350–$380 battle, and the stock’s technicals align with that range. Your job? Stay nimble. If AVGO surprises to the upside, ride the momentum. If it breaks down, the puts at $300–$310 could become your safety net. Either way, the volatility is your friend—just don’t let it become your enemy.