AVGO at Crossroads: Calls at $350 Signal Optimism, Puts at $310 Hedge Risk as AI Margins Test $340 Support

• AVGO trades at $339.79, down 0.01% with volume surging to 16.7M shares.
• RSI at 37.5 (oversold) and MACD bearish (-3.99 histogram) hint at potential bounce or breakdown.
• Options OI shows heavy call interest at $350–$380 and puts at $300–$310, with a near-even put/call ratio (0.98).

The stock is teetering at a critical inflection point: technicals suggest exhaustion in the downtrend, but options data reveals a split between cautious optimism and margin-driven pessimism. Let’s break it down.Bullish Pockets and Bearish Safeguards in Options Flow

The options market is a chessboard of bets. For this Friday’s expiration (Dec 19), AVGO20251219C350 and AVGO20251219C380 dominate call open interest (16,103 and 14,254 contracts, respectively). These strikes act like a bullish pressure valve—traders are pricing in a rebound above $340, the 30D support level.

But the puts tell a different story. AVGO20251219P310 (13,089 OI) and AVGO20251219P300 (14,216 OI) are massive hedges against a breakdown. Think of it as a bearish safety net: if AI margin fears escalate, these puts could accelerate the slide.

The near-1:1 put/call ratio (0.98) is telling. It’s not a one-sided bet—it’s a wait-and-see stance. Traders are bracing for either a rebound or a breakdown, but not committing fully to one.

News Flow: AI’s Double-Edged Sword

Broadcom’s recent 17% slump (Dec 12–14) wasn’t about missing numbers—it was about margin compression. AI revenue soared 74% to $6.5B, but gross margins are forecasted to drop 1 percentage point in Q1 2026. Analysts are split: some see a $455 price target (33% upside), others warn of a $1.6T valuation bubble.

Here’s the rub: the market is pricing in AI’s growth but discounting its profitability. That’s why the stock’s 52-week high ($414.61) feels like a distant memory. Investors love the story but fear the math.

Actionable Trade Ideas: Precision Entries for AVGO

For options traders, the sweet spot is AVGO20251219C350 (this Friday’s $350 call). If the stock breaks above today’s intraday high ($347.50), this strike could see a pop. Alternatively, AVGO20251226P310 (next Friday’s $310 put) offers a hedge if the stock dips below $335.06 (intraday low).

For stock players, consider a long entry near $341.27 (30D resistance). Target $347.50 if the 20D EMA ($340.15) holds. A breakdown below $335.06 would validate bearish sentiment—AVGO20251226P310 becomes a safer play then.

Volatility on the Horizon: A Tightrope Walk

Broadcom’s future hinges on one question: Can AI’s revenue growth offset its margin drag? The options market isn’t betting on a miracle—it’s hedging for both outcomes. For now, the stock is trapped between $326.39 (lower Bollinger Band) and $347.50 (intraday high).

If you’re in, watch the $340 pivot point. Above it, the bulls have a shot at $350+; below it, the puts at $310 could turn into a freefall. This isn’t a high-conviction trade—it’s a high-leverage gamble on a sector at a crossroads.

Final Take: The data says “wait.” But if you must act, do it with precision—and a stop-loss. The AI story isn’t dead, but the margin math is alive and kicking.