Option Focus | Broadcom's $1.56 Million Net-Credit Calendar Call Spread Sells Upside, Signaling Bearish-to-Neutral Premium Collection

Option Witch
Sep 25

Broadcom closed at USD 350.36, down 1.30%.

A four-leg calendar-style call spread collected a net credit of $1.56 million, while the call/put volume ratio stood at 1.85. The dominant trade sold 1,757 October 2026 $350.0 calls and 1,757 October 2026 $357.5 calls, while buying 1,757 September 2026 $365.0 calls and 1,757 September 2026 $375.0 calls.

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Options Indicators

Broadcom’s implied volatility is 37.93%, and with an IV percentile of just 1.99%, current option volatility sits at the low end of its recent range, indicating options are cheaply priced rather than rich. The IV/HV ratio of 1.11 suggests implied volatility is only modestly above realized volatility, so the market is not assigning a large premium to forward uncertainty at this point. Overall, Broadcom’s options appear relatively inexpensive from a volatility-pricing perspective.

The Call/Put volume ratio is 1.85.

Large Trades

A call spread structure collected a net credit of $1.56 million through a four-leg calendar-style combination, with 1,757 contracts sold on the October 2, 2026 $350.0 call and 1,757 contracts sold on the October 2, 2026 $357.5 call, while simultaneously buying 1,757 contracts of the September 25, 2026 $365.0 call and 1,757 contracts of the September 25, 2026 $375.0 call. Because this combination includes both sell calls and buy calls, it is best viewed as a spread strategy rather than a synthetic position, and the relevant size is the stated net credit of $1.56 million. With AVGO referenced at $350.36, the short $350.0 call sat slightly in the money, the short $357.5 call was out of the money, and both long calls were out of the money. Strategically, this looks like a premium-collection trade with a bearish-to-neutral lean, expressing the view that upside will remain capped while monetizing richer premium in the later-dated short calls against cheaper near-dated long-call protection.

Overall, the large-trade flow leans bearish on AVGO. The dominant institutional activity was a net-credit call spread that sold upside exposure and emphasized premium harvest rather than upside participation, which suggests traders were more comfortable fading further gains than positioning for a strong bullish breakout. Taken together with the aggregate bulk-order figures, the options flow points to cautious or mildly negative sentiment, with expectations for limited upside and a preference for income-generating bearish-to-neutral structures.

Strategy Reference

For a low assignment probability approach, sellers could focus on out-of-the-money calls near the $375.0 strike or higher, while traders preferring not to post too much margin may consider a bear call spread such as selling the $357.5 call and buying the $365.0 call in the same expiration.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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