Alphabet’s $320 Put OI Surge and $350 Call Contention: A Volatility Playbook for 2026’s AI Bet

• GOOG plunges 2.56% to $322.84, breaking below its 30D support at $315.04
• Options data shows 8,792 puts at $320 (this Friday’s top OI) vs. 7,279 calls at $350
• Block trade: 7,907 puts sold at $325 (exp 3/27) hinting at institutional confidence in near-term floor

Here’s the deal: GOOG’s options market is screaming about a volatile crossroads. While the stock’s 100D and 200D averages ($292.65, $238.99) scream long-term bullishness, today’s price action and options positioning suggest a short-term battle for control. The key question? Will AI optimism push the stock back above $330, or will profit-taking and CapEx concerns drag it lower? Let’s break it down.

The OI Chessboard: Puts at $320 vs. Calls at $350

Options traders are hedging both ways. The $320 puts (8,792 OI) act like a safety net for bears, while the $350 calls (7,279 OI) represent a bullish bet on AI-driven recovery. But here’s the twist: the block trade selling 7,907 puts at $325 (GOOG20260327P325) suggests big players are betting against a deep selloff. They’re essentially saying, "We’ll take the risk if the stock dips near $320."

This creates a tightrope scenario. If GOOG holds above $322.67 (lower Bollinger Band), the $320 puts could act as a catalyst for a rebound. But if it breaks below $315.04 (30D support), the puts might trigger a cascade of stop-loss orders. The call-heavy $350 strike, meanwhile, hints that bulls are ready to pounce if the stock reclaims its 30D MA at $327.50.

AI Hype vs. Reality Check: What the News Actually Means

Alphabet’s $185B AI spending plan is the headline act, but the market isn’t buying it blindly. The 0.54% dip on Feb 5 shows investors are wary of near-term profit erosion from CapEx. Yet analysts like Pivotal’s $420 target (up 26.1%) and Guggenheim’s $375 call keep the long-term flame alive. The catch? Microsoft’s 23.5% six-month drop and Broadcom’s AVGO surge highlight the sector’s shifting tides.

Here’s the rub: GOOG’s insider selling ("negative sentiment" in the past quarter) clashes with its Q4 earnings beat. This duality means the stock could swing wildly between "AI savior" and "CapEx caution" narratives. The options market’s put/call ratio (0.81) leans slightly bullish, but don’t ignore the 8,792 puts at $320—they’re a hedge against that optimism.

Trade Ideas: Play the Volatility, Not the Noise

For options traders, the GOOG20260213P320 puts (8,792 OI) are a must-watch. If GOOG dips below $322.67 (lower Bollinger Band), these puts could ignite a short-term rebound. For the bold, buying these puts at $320 with a stop above $325 makes sense. Conversely, the GOOG20260213C350 calls (7,279 OI) offer a high-risk, high-reward play if the stock breaks above $330.6 (intraday high).

Stock traders: Consider entry near $315.04 (30D support) with a tight stop below $312.5. If the stock holds, target $327.50 (30D MA) as a first exit. For the aggressive, a long entry at $322.84 (current price) with a stop at $320 could capitalize on the block trade’s floor.

Volatility on the Horizon: The AI Tightrope

Alphabet’s story is a tug-of-war between AI euphoria and CapEx pragmatism. The options market’s $320/$350 battle lines and the block trade at $325 suggest a volatile few weeks ahead. If the stock can hold its 30D support, the AI narrative might reignite. But a break below $312.5 could force a reevaluation of that $420 price target. Either way, this is a stock where patience and precise execution will separate winners from the AI hype crowd.