Option Focus | Broadcom’s $3.93 Million Bearish Put Spread and $1.90 Million Calendar Call Combo Signal Institutional Caution Despite Low IV

Option Witch
Oct 16

Broadcom closed at 344.33 USD, down 0.55 %.

Large options flow was dominated by defensive positioning, including a $3.93 million bearish put spread and a $1.90 million calendar call combination opened for net credits. Both structures leaned cautious to bearish rather than outright directional bets, reflecting institutional focus on premium collection and downside protection while current option pricing remains relatively cheap.

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Options Indicators

Broadcom’s implied volatility is 39.28%, and with an IV percentile of 10.36%, current option volatility sits on the low side relative to its own historical range, indicating that options are cheaply priced rather than expensive. The IV/HV ratio of 1.13 also suggests implied volatility is only modestly above realized volatility, pointing to a relatively restrained premium environment rather than an overstretched one.

The Call/Put volume ratio is 1.21.

Large Trades

A bearish put spread with a net credit of $3.93 million stood out among the displayed large trades, built by selling the October 16, 2026 $390.00 put and buying the October 16, 2026 $410.00 put. With AVGO referenced at $344.33, both strikes were in the money, and the structure is best read as a spread strategy rather than outright downside chasing. Because it was opened for a net credit, the trade suggests premium collection tied to a bearish positioning bias, with the long higher-strike put still preserving downside exposure while the short lower-strike put helps finance the structure. Strategically, this points to a controlled bearish view rather than an aggressive naked downside bet.

A calendar-style four-leg call combination was also notable, executed for a net credit of $1.90 million through short October 23, 2026 calls at $345.00 and $352.50 against long October 16, 2026 calls at $375.00 and $385.00. All four call strikes were out of the money versus the $344.33 reference price, making this primarily a premium-selling spread structure rather than an outright bullish call purchase. The net-credit profile indicates an income-oriented or hedged positioning approach, likely expressing skepticism that AVGO will sustain enough upside over the shorter-dated window to threaten the sold strikes, while the farther-dated long calls cap risk and preserve some upside contingency. Overall, the setup leans cautious to mildly bearish in practical trading intent.

Overall, the large-trade flow points clearly bearish. The broader block activity is dominated by sizable put buying and bearish option structures, showing that institutional participants were far more focused on downside protection and directional downside exposure than on upside accumulation. Even where spreads and multi-leg combinations reduced cost or collected premium, the consistent theme was defensive or negative positioning rather than constructive bullish speculation, reinforcing a firm bearish near-to-medium-term sentiment on AVGO.

Strategy Reference

For a low assignment probability with similar premium-collection intent, an out-of-the-money October 23, 2026 call at $400.00 offers a wider buffer than the sold $352.50 strike, though a bear call spread remains preferable if reduced margin is a priority.

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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