AVGO Options Signal $297.5 Put Dominance: A Bearish Play Amid AI Optimism?

• Put/call ratio for open interest hits 1.14, with $297.5 puts (OI: 48,297) dominating next Friday’s chain.
• Block trades in deep puts (AVGO20260515P300, AVGO20260618P320) hint at institutional bearishness.
• Q3 earnings beat and AI-driven revenue projections clash with short-term technical weakness.

Here’s the thing: Broadcom’s options market is whispering a bearish story, even as fundamentals scream bullish. The stock’s 1.6% drop today—despite a $18.02B revenue beat—has traders scrambling to parse the split-screen narrative. Let’s break it down.

"The $297.5 Put: A Whale’s Anchor in a Volatile Sea"

If you squint at the options chain, the $297.5 put (expiring 2026-01-30) is a red flag. With 48,297 open contracts, it’s 10x the next closest put (315 strike). That’s not just noise—it’s a liquidity magnet. Think of it as a dam holding back a flood: if AVGO cracks below $315, that put could become a magnet for panic selling. The block trade in AVGO20260515P300 (500 contracts, $1.25M turnover) adds weight. Someone’s hedging a big bet, and they’re not alone.

But don’t ignore the calls. The $340–$360 call range (OI: 9,737–6,315) shows lingering bullish conviction. The MACD (-6.46) and RSI (38.8) suggest oversold conditions, but Bollinger Bands show the stock is still below its 200-day MA (300.64). This is a tug-of-war between short-term bears and long-term AI believers.

"Institutional Love vs. Options Fear: Can AVGO’s Story Hold?"

The news isn’t all bad. Maryland State Retirement and Cathie Wood’s ARK just boosted stakes. Q3 earnings ($1.95/share) beat estimates, and AI chip revenue is projected to double in Q1. Analysts like Piper Sandler ($430 target) and UBS ($475) are bullish on VMware integration and TSMC partnerships. But here’s the rub: insider sales (779K shares in 90 days) and Cypress Funds’ trimming hint at profit-taking. The market’s reacting to both the "AI gold rush" and the "sell the news" playbook.

"Trade Ideas: Play the Put Put or the Call Spread?"

For the bearish angle: Buy the AVGO20260130P297.5 (strike: $297.5, exp: 1/30). If AVGO breaks $315 (intraday low today), this put could see a 20%+ move. Stop-loss: $300. For a bullish counterplay: Buy the AVGO20260130C340 and sell the AVGO20260130C360 as a vertical spread. If the stock rebounds above $321.99 (intraday high), the spread could capture a 15% gain. For stock: Consider entry near $314–$315 (support zone) with a target at $340 (resistance). A break below $310 triggers a reevaluation.

"Volatility on the Horizon: Where to Draw the Line"

Broadcom’s at a crossroads. The options market is pricing in a 10% downside risk (to $297.5), but fundamentals point to a $430+ ceiling. The key is timing: Will AI-driven buying outpace profit-taking? Or will the $300–$315 range become a battleground? Either way, the next 7 days (expiring 1/30) will test whether this is a correction or a catalyst. Stay nimble—this stock’s story isn’t over yet.