Adobe (ADBE) Options Signal $345 Put Protection and $400 Call Volatility – Here’s How to Position for the Upcoming Earnings Catalyst

• Adobe’s stock (ADBE) trades at $358.92, up 1.34% intraday, but technical indicators like the Kline pattern and 200D SMA ($397.85) suggest a long-term bearish bias.
• Options data reveals a 0.87 put/call open interest ratio, with heavy call OI at $400 and put OI at $345, signaling a bearish skew but embedded bullish volatility expectations.
• Adobe’s Q3 2025 earnings beat and AI-driven ARR growth (now $5B+) validate its AI monetization strategy, yet Morgan Stanley’s downgrade highlights near-term skepticism.

Adobe’s stock is caught in a tug-of-war between bullish AI-driven fundamentals and bearish technicals, with options activity amplifying the tension. The current price of $358.92 sits just below the 200D SMA and within the Bollinger Bands’ middle band ($354.47), while the RSI (54.5) and MACD (0.918) hint at a potential short-term reversal. However, the options market tells a more nuanced story: heavy call open interest at $400 (1,681 contracts) and put OI at $345 (1,867 contracts) suggest a bearish bias with embedded volatility expectations. Traders must weigh Adobe’s AI-driven growth against its structural technical headwinds and the looming risk of profit-taking after its recent earnings pop.

Bearish Skew, Bullish Volatility: Decoding the Options Imbalance

The options chain for ADBE reveals a stark imbalance in open interest, with puts dominating at the $345 strike (1,867 OI) and calls surging at $400 (1,681 OI). This distribution implies that market participants are hedging downside risk while also pricing in a potential rally to $400. The put/call ratio of 0.87 (put OI: 204,246; call OI: 234,421) reinforces a bearish sentiment, as more capital is allocated to downside protection. However, the heavy call OI at $400—despite its 10% distance from the current price—suggests that traders are not ruling out a sharp rebound, possibly driven by Adobe’s AI monetization progress or a short-covering rally.

The absence of notable block trades (none reported) means the current options activity is driven by retail and institutional speculative positioning rather than large-scale institutional bets. This could indicate a fragmented market, where individual traders are layering in protection and volatility plays ahead of Adobe’s next earnings report or AI-related announcements.

AI-Driven Optimism vs. Market Skepticism: News That Shapes the Narrative

Adobe’s recent news flow is a mixed bag. The company’s Q3 2025 earnings beat, raised guidance, and AI-driven ARR growth (now $5B+) validate its monetization strategy, with 99% of Fortune 100 companies adopting tools like Firefly and GenStudio. These developments should, in theory, justify a higher valuation. However, Morgan Stanley’s downgrade to “equal-weight” and reduced price target ($450) highlight skepticism about slowing Digital Media ARR growth and competition in the generative AI space. The stock’s 3.7% drop following the downgrade underscores the market’s sensitivity to earnings revisions and AI monetization doubts.

Investor perception is further complicated by Adobe’s strategic partnerships, such as its collaboration with Qualcomm and the Premier League, which signal long-term AI integration but may not immediately translate to revenue. The key question is whether Adobe can sustain its AI-driven growth without relying on one-time adoption spikes. For now, the news supports a cautious bullish stance, but the options market’s bearish skew suggests traders are pricing in a potential pullback.

Actionable Trade Ideas: Protecting Downside While Capturing Volatility

For options traders, the most attractive setups involve the $345 puts and $400 calls expiring this Friday (September 20). The $345 put (OI: 1,867) offers downside protection if Adobe’s stock retests the 200D SMA or breaks below the 30D support ($353.11). A long put position here could capitalize on a potential 5% drop to $340, with a stop-loss above $352.78 (intraday low). Conversely, the $400 call (OI: 1,681) is a high-risk, high-reward play for a short-term rally, particularly if Adobe’s AI-driven ARR growth outperforms expectations. A covered call strategy using the $400 strike could generate premium income while capping upside potential.

For stock traders, consider entering near $346.81 (200D support) with a target at $368.17 (Bollinger Upper Band) if the 30D support holds. A break below $340.77 (Bollinger Lower Band) would signal a deeper correction, warranting a shift to defensive positions. Given the bearish Kline pattern and 200D SMA resistance, a bullish trade should only be initiated after a confirmed breakout above $360.

Volatility on the Horizon: Balancing AI Optimism with Market Skepticism

Adobe’s stock is at a crossroads. The AI-driven fundamentals are robust, with enterprise adoption of Firefly and GenStudio accelerating. However, the technicals and options market sentiment suggest a near-term bearish bias, driven by profit-taking and skepticism about long-term monetization. Traders must navigate this duality by hedging downside risk with the $345 puts while positioning for a potential rebound via the $400 calls. The coming weeks will be critical: Adobe’s ability to maintain its AI-driven growth trajectory without triggering a profit-taking selloff will determine whether the stock reclaims its 200D SMA or enters a deeper correction. For now, the data points to a volatile but strategically rewarding environment for those who balance optimism with caution.