Broadcom (AVGO) at a Crossroads: OTM Put Dominance and $340 Block Trade Signal Risk and Trade Setups

• Open interest in out-of-the-money (OTM) puts is significantly higher than calls (Put/Call ratio: 1.16), especially at the $275–$310 range.

• A $340 put block trade of 450 contracts hints at a whale hedging or positioning for a near-term move.

• Technicals show a short-term bearish bias with RSI near neutral (49.68) and MACD bearish crossover.

The options market is whispering caution. While the stock has shown resilience with a $322.93 intraday price and strong fundamentals, the open interest data tells a different story. Put open interest is heavily concentrated below the stock’s current level, particularly at $275 and $300, which suggests traders are betting on downside risk. But here’s the twist: there’s also heavy call interest at $350–$420—traders aren’t ready to give up on the upside, either. So, where’s the balance of risk and opportunity?

What the OTM Options and Block Trade Reveal About Market Mood

The options market is a barometer of crowd sentiment, and right now, it’s leaning bearish. The put/call ratio of 1.16 is a clear signal that more traders are guarding against a potential pullback. The largest OTM puts are at $275 and $280 with 28,504 and 11,525 open contracts respectively. That’s a lot of bearish armor. And the $340 put block trade—450 contracts, $936K turnover—could be a whale hedging a large position or signaling a near-term target for a short-term selloff.

On the call side, the highest open interest is at $350 and $370, but the puts at $275 and $280 are nearly double in volume. That imbalance suggests the market is pricing in more downside pressure, especially with the 200-day moving average at $323.79 acting as a key support zone. If the stock breaks below this level, the puts could start to come into play more seriously.

News Flow Adds Complexity, But Strength Remains Under the Hood

Broadcom’s story hasn’t slowed. Record Q4 revenue, a $10B share repurchase plan, and a $65B VMware acquisition approval are big wins for the long-term. The company is clearly on a growth trajectory, and with $28B in cash reserves, it has the firepower to continue its aggressive expansion. But the U.S. trade restrictions and recent geopolitical concerns are casting a shadow over its Asian operations. This mix of optimism and risk makes the options market’s bearish tilt all the more interesting.

Investor perception is key. If the trade tensions escalate, the $275–$300 put range could get hit much harder. But if Broadcom continues delivering, the $350–$375 call strikes might still offer upside. It’s a tug-of-war between growth and macro uncertainty—right now, the bears have more firepower in the short term.

Where to Place Bets: Specific Stock and Options Setups

If you're trading the stock, look for a test of support at $321.55 (intraday low) and the 200D MA at $323.79. A close below $323.79 would confirm a shift in momentum. Consider entry near $323.50 if that support holds. A break below $310 (lower Bollinger band) would signal deeper bearish pressure. On the upside, the 30D support at $332.17 is still a target if the stock bounces.

For options players, the most strategic plays today center on the AVGO20260327P340 put. With 450 contracts traded at $340 strike and just three days until expiration, this is a high-impact setup. If you're bullish, consider the AVGO20260327C350 call as a short-term play, with the stock near that strike. For longer-term positioning, the AVGO20260327P295 put with 10,533 OI is another key level to watch.

Volatility on the Horizon: Stay Ready for a Move

Broadcom is sitting at a crossroads. The company’s fundamentals are strong, but the options market is clearly hedging for a pullback. The next few days could decide whether this is a short-term correction or the start of a more extended consolidation. With a big block trade at $340 and a put-heavy OI profile, the risk-biased trade is well defined. For those who believe in the company’s long-term potential, now could be a good time to get strategic about entry points and risk management.

One thing’s for sure: the coming week is shaping up to be a pivotal moment for AVGO.