AVGO Options Signal Bullish Battle at $420–$320 as Earnings Loom: Trade Setup for Q4 Surge or Crash

• Broadcom (AVGO) trades at $408.03, down 1.2% amid heavy options activity.
• Call open interest spikes at $420 and $500 strikes; puts dominate at $320 and $380.
• Earnings on Dec 11 could trigger volatility as AI revenue forecasts clash with valuation concerns.

Here’s the thing: AVGO’s options market is locked in a tug-of-war between bulls eyeing a $440 price target and bears bracing for a $320 support test. With the stock sitting just below its 30-day moving average and RSI flirting with overbought territory, today’s action hints at a pivotal inflection point. Let’s break down what the numbers—and the whispers in the options pit—really mean for your trading desk.

The Options Crossroads: Calls at $420, Puts at $320 Signal a High-Stakes Showdown

The options chain tells a story of divided conviction. This Friday’s top call open interest piles up at $420 (OI: 5,865) and $500 (OI: 4,606), while puts dominate at $320 (OI: 4,829) and $380 (OI: 4,537). Next Friday’s data amplifies the tension: calls at $410 (OI: 7,301) and $450 (OI: 6,773) face off against puts at $300 (OI: 9,958) and $290 (OI: 7,802).

This isn’t just noise. The 1.04 put/call ratio (based on open interest) suggests a near-even bet on direction, but the strike distribution tells a different tale. Heavy call buying above $420 implies institutional players are hedging for a post-earnings pop, while the $320–$300 put pile-up shows fear of a sharp correction if AI revenue falls short. The lack of block trades means no whale-sized bets are skewing the data—this is pure crowd sentiment.

Earnings Narrative: AI Hype vs. Valuation Reality Check

Rosenblatt’s $440 price target and HSBC’s $535 call hinge on Broadcom’s AI semiconductors hitting $6.2B in Q4 revenue. But with shares up 180% since April and a 42x forward P/E, the market is pricing in perfection. The news flow is a mixed bag: VMware’s cloud growth and TPU traction are bullish, but reliance on a few hyperscale clients and VMware’s cloud competition are red flags.

Here’s the rub: If earnings exceed $1.87 EPS and guide higher for FY26, the $420 calls could ignite. But a miss—even a small one—might send the stock tumbling toward the $322 lower Bollinger Band. The options market’s $320–$300 put focus isn’t just caution—it’s a warning shot.

Trade Ideas: Play the Earnings Edge with Precision

For options traders, the most compelling setup is a bull call spread using the AVGO20251219C420 and AVGO20251219C450 strikes. With the stock hovering near $408, buying the $420 call (next Friday expiry) offers leverage if earnings catalyze a $440+ move. The $450 call can cap costs as a sell-to-cover target.

Bearish players might consider the AVGO20251219P320 put for downside protection. At $408, it’s a 20% buffer to the strike price, offering a safety net if the stock gaps lower post-earnings. For stock traders, a buy-the-dip entry near $394 (today’s intraday low) could work if the 30D support at $339.98 holds. A breakout above the 200D MA ($338.30) would validate the bullish case.

Volatility on the Horizon: Position for the Storm

The coming 48 hours will test AVGO’s narrative. A strong earnings report could send the stock surging toward $440, validating the call-heavy options bets. A soft guide or revenue miss, however, might trigger a $320–$330 freefall. Either way, the options market has already priced in extremes—your job is to pick a side before the gavel drops.

For those who prefer the stock, keep a close eye on the 30D MA ($369.55) as a dynamic support/resistance level. If the stock closes above $412.97 (previous close) by Friday, the bulls gain momentum. Below $394.19 (today’s low), the bears take control. The key takeaway? This isn’t just about Broadcom—it’s about whether the AI hype cycle can sustain a $400B+ valuation. The answer comes tomorrow.