AVGO Options Signal Bullish Momentum: Key Strikes at $420 and $410 Set Up for Earnings-Driven Volatility

• Broadcom (AVGO) trades at $405.56, up 1.11% with volume surging to 8.8M shares.
• Options data shows heavy call open interest at $420 and $410, while puts cluster below $320.
• Analysts from Cantor Fitzgerald and Mizuho raised price targets to $525 and $435, citing AI-driven growth.
• Stock approaches all-time highs as Q4 earnings loom on Dec 11.

Here’s the takeaway: AVGO is primed for a breakout. The options market is pricing in a strong upside bias, technicals confirm a bullish trend, and AI-related news fuels momentum. But with insider selling and a crowded call chain at $420, traders need to balance aggression with caution.

The Bullish Battle at $420 and $410

Let’s start with the options data. This Friday’s call options show AVGO20251212C420 (OI: 5,902) and AVGO20251212C410 (OI: 3,627) as the most watched strikes. Next Friday’s chain amplifies this with AVGO20251219C410 (OI: 6,579) and AVGO20251219C420 (OI: 5,176). These strikes form a "bull trap"—traders are betting on a push above $406.34 (today’s high) toward $420.

On the downside, puts cluster at $320 (AVGO20251219P320, OI: 10,443) and $300 (AVGO20251219P300, OI: 7,812). While this suggests some hedging activity, the put/call ratio (1.04) leans slightly bearish. But with RSI at 71.5 and MACD above its signal line, the technicals scream "higher." The risk? A breakdown below $395.51 (today’s low) could trigger panic selling.

News That Fuels the Fire

Broadcom’s story isn’t just technical. Analysts are piling in: Cantor Fitzgerald’s $525 target and Mizuho’s $435 call hinge on AI-driven revenue from Google, Meta, and Apple. The Microsoft partnership for custom AI chips? That’s the kind of headline that turns cautious buyers into momentum traders.

But here’s the twist: CEO Hock Tan sold $33.95M in shares in September. Insiders aren’t all-in. That creates a tension—bullish fundamentals vs. bearish insider sentiment. For now, the crowd is betting on AI growth, but if Q4 earnings miss expectations, those puts at $300 might get a workout.

Trade Ideas: Calls, Stock, and a Collar

For options traders, the AVGO20251212C420 (this Friday) and AVGO20251219C410 (next Friday) are the most compelling. Why? The $420 strike aligns with today’s intraday high and analyst price targets. If AVGO breaks above $406.34, this call could run. For a longer play, the $410 strike next Friday offers a cheaper premium with a lower breakeven.

Stock traders: Consider entry near $400 (support from Bollinger Bands) with a target at $420. A stop-loss below $395.51 would protect against a breakdown. For a safer play, pair a long stock position with a put at AVGO20251219P380 to cap downside risk.

Volatility on the Horizon: Positioning for AVGO’s Earnings Catalyst

The next few days will test AVGO’s resolve. Earnings on Dec 11 could validate the $525 price targets—or expose cracks in the AI narrative. Options traders should monitor the $420 and $410 strikes for gamma squeezes, while stock buyers need to watch volume and the 200D MA at $276.14 (a distant floor).

This isn’t a high-probability trade—it’s a high-reward setup for those comfortable with volatility. If AVGO holds $400 and reports strong AI revenue, the $420 calls could double. But if insiders continue selling or earnings disappoint, those puts at $300 might see action. Either way, the options market has already priced in a story—now it’s up to the fundamentals to deliver.