AVGO Options Signal $340 Put Dominance: A Volatility Play for AI-Driven Rebound?

• AVGO trades at $346.68, down 1.55% intraday, with RSI at 36.27 (oversold territory)
• Put/call open interest ratio at 1.03, highlighting bearish bias ahead of Friday’s expiry
• $340 puts (OI: 7,323) and $360 calls (OI: 9,462) dominate near-term sentiment

Here’s the tension: options traders are hedging for a dip, but technicals hint at a rebound. Broadcom’s AI-driven narrative could spark a breakout—or a breakdown. Let’s break it down.

The $340 Put Wall and Call Ceiling

Options data tells a story of caution. This Friday’s $340 puts (AVGO20260102P340) lead the pack with 7,323 open contracts, nearly double the next put strike. Meanwhile, $360 calls (AVGO20260102C360) hold 9,462 OI, suggesting some bets on a rebound. The put/call ratio of 1.03 (favoring puts) amplifies the bearish tilt. But here’s the catch: AVGO’s RSI is screaming oversold, and price is near its 20-day support at $339.93. Traders are pricing in risk, but technicals hint at a potential bounce. The danger? If AI-related fears intensify, the $311 lower Bollinger Band could become a magnet.

News vs. Options: A Clash of Narratives

Broadcom’s recent headlines are a mixed bag. Analysts upgraded it to "Strong Buy" after aggressive earnings revisions, yet Q4 results triggered a 16% post-earnings selloff due to AI shipment delays. The options market seems to side with the bearish camp—$210 puts (AVGO20260109P210) next week have 3,109 OI, absurdly far out of the money. But don’t dismiss the bulls: Broadcom’s $73B AI backlog and TPU chip partnerships with Google still draw long-term buyers. The key question: Will short-term margin concerns overshadow its AI infrastructure story? Right now, options traders are hedging for the worst but pricing in a possible rebound.

Trade Ideas: Puts for Protection, Calls for Catalyst

For options players, two setups stand out:

• Bearish Play: Buy AVGO20260102P340 puts if price breaks below $344.69 (intraday low). Target $330 if the $340 level collapses.
• Bullish Play: A call spread using AVGO20260102C350 ($6,016 OI) and AVGO20260102C360 ($9,462 OI) if price holds above $344.69. Caps risk while riding a rebound.

Stock traders: Consider entries near $344 (current intraday low) with a stop below $339 support. If it holds, target $350 (Bollinger Middle Band) or $368.98 (middle band). But if it breaks $339, brace for a test of $311.

Volatility on the Horizon

AVGO sits at a crossroads. The options market is pricing in a dip, but technicals and AI-driven fundamentals suggest a rebound could be brewing. The coming days will test whether sentiment shifts from fear to faith. For now, the $340 put wall and $360 call ceiling define the battlefield. Play it like a chess game: hedge with puts, but keep a call in your back pocket. The AI train isn’t stopping—just delayed.