AVGO Options Signal $410 Call Contention as Earnings Approach: Here’s How to Position for Volatility

• Broadcom (AVGO) trades at $402.11, down 1.03% from its 52-week high of $406.29, with a bullish engulfing pattern and overbought RSI (73.68) hinting at near-term exhaustion.

• Options data shows a 1.05 put/call open interest ratio, but next Friday’s $300 put (OI: 10,422) and $410 call (OI: 7,449) suggest hedging and bullish bets ahead of earnings.

• Analysts target $433–$440 as a key range, but insider selling and a 100x P/E ratio raise caution about overvaluation.

The market is bracing for Broadcom’s Q4 earnings report on Thursday, and the options activity tells a story of cautious optimism. While technicals and fundamentals lean bullish, the overbought RSI and deep OTM put positioning signal a potential tug-of-war between momentum traders and risk-off players. Let’s break it down.

Bullish Calls vs. Deep Put Protection: What the Options Chain Reveals

Looking at the options chain, the next Friday expiration (Dec 19) shows a clear divide. Calls at $410 (OI: 7,449) and $420 (OI: 4,857) are the most popular bullish bets, while puts at $300 (OI: 10,422) and $310 (OI: 9,307) dominate the downside. This suggests two camps: traders expecting a post-earnings pop and those hedging against a sharp correction. The lack of block trades adds intrigue—no major institutional moves to skew the odds.

The $410 call (AVGO20251219C410) is particularly telling. With 7,449 contracts open, it’s a strike where bulls see a 2.5% move as just the start. But don’t ignore the $300 put (AVGO20251219P300)—its massive open interest implies a 25% drop is on the radar for some. That’s not a typical bearish play; it’s a bet on a black swan event, like a broader tech selloff or a surprise earnings miss.

Earnings Narrative: Can Broadcom Justify Its 100x P/E?

The news flow is all bullish: $17.4B in expected Q4 revenue, a 72% YTD rally, and analyst upgrades to $435–$440. But here’s the catch—Broadcom’s 100x P/E dwarfs the semiconductor average of 38x. Analysts love the AI and XPU tailwinds, but insiders like CEO Hock Tan have been selling shares. That’s a red flag for some, a sign of overvaluation for others. The key question: Can Broadcom’s $110B backlog and $5.2B AI chip sales justify this multiple if growth slows in 2026?

The options market isn’t fully pricing in this debate. The $410 call’s popularity assumes earnings will validate the current P/E. But if results fall short of the $1.87 EPS consensus, the $300 put could ignite a panic. Retail traders should watch the 30D support at $339.98—break below that, and the 200D support at $187.89 becomes a grim possibility.

Actionable Trades: Calls for the Bold, Puts for the Pragmatic

For the bullish: Buy the AVGO20251219C410 call if AVGO breaks above today’s intraday high of $405.70. With earnings on Thursday, a pop to $410+ would validate the call’s premium. Target a 10–15% move by Dec 19.

For the cautious: Buy the AVGO20251219P300 put as insurance. It’s a long shot, but if AVGO gaps down post-earnings (unlikely but possible), this put could pay off. Set a tight stop if the stock holds above $399.56.

Stock traders: Consider a long entry near $399.56 (intraday low) if the 30D support at $339.98 holds. Target $410 first, then $420. If AVGO dips to $395, it could test the 30D support—use that as a low-risk entry.

Volatility on the Horizon: Positioning for Earnings

Broadcom’s Q4 report is a high-stakes poker game. The bulls have momentum, the bears have deep puts, and the market is pricing in a tight outcome. My take? Ride the $410 call if you’re confident in the AI narrative, but keep a small position in the $300 put. The real action starts Thursday—where you stand now defines your edge tomorrow.