AVGO Sees 9,833 Contracts Traded on Jun-20-25 255 Calls—IV Drops Nearly 11% Despite Heavy Volume
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Surge in Option Volume and Stock Price Moves After VCF 9.0 News
Broadcom (AVGO) grabbed attention mid-day as its Jun-20-25 255 Call became the most traded AVGO option, with a robust 9,833 contracts changing hands—representing 7.1% of total option activity as of 12:34 PM. Meanwhile, the stock itself nudged higher, gaining $1.68 or 0.67% to reach $251.05 following the headline-grabbing announcement of VMware Cloud Foundation 9.0. This new release promises broad advancements in private cloud technology, AI integration, and cost transparency—adding fuel to the recent price action.
Implied Volatility Drops 10.9% as Bulls and Bears Clash on 255 Calls
While call volumes soared, implied volatility (IV) on the contract slid notably. The 255 Call’s IV fell from a previous close of 35.5 to 31.6—down a striking 10.9%. This drop comes even as trading intensity increased, with today’s volume equal to 85% of the prior day’s open interest (11,486 contracts).
The data shows that 40.4% of the trades were bought, while 59.6% were sold, suggesting a moderate bias toward call sellers over buyers. Notably, retail participants made up a hefty 81% of trades, indicating strong activity from smaller investors. Here’s a quick glance at key trade and IV metrics:
| Metric | Jun-20-25 255 Call |
|---|---|
| Today's Volume | 9,833 |
| Percent of Option Volume | 7.1% |
| Trade Price VWAP | $1.97 |
| Last Trade Price | $1.00 |
| IV VWAP | 31.6 |
| Change in IV vs Prior Close | -10.9% |
| Open Interest (prev day) | 11,486 |
| Open Interest Change | -627 |
Skew Indicators and Trade Flow Suggest Mild Bearishness from Option Sellers
Despite strong headline catalysts and higher stock price, the data leans slightly bearish for this strike: most of the 255 Call flow (nearly 60%) was sold, not bought, implying that traders expect AVGO to struggle to break through the $255 barrier in the very near term. Meanwhile, open interest dropped by 627 contracts since the previous day—possibly reflecting some traders locking in profits or closing positions post-announcement. With a heavy tilt toward retail activity (81%), this spike in volume is less likely to represent a bold institutional bet.
Implied Volatility Near the Bottom of Today’s Range Signals Lower Hedging Costs
The IV story adds another twist: while implied volatility peaked at 34.0 today, it was as low as 29.6 and settled at 33.1 on the last trade, remaining below the prior session’s levels. The rapid IV drop as trading heated up means option sellers—those writing the calls—are receiving lower premiums to take the other side of bullish trades, indicating reduced expectations for a big move by expiry.
Market Context: Bullish Headlines Meet Cautious Options Activity
On the news front, Broadcom’s major push into modern private cloud with VMware Cloud Foundation 9.0 set a bullish tone. With advanced features for AI, security, and cost transparency, there are compelling fundamental drivers behind the move. However, the fact that most volume on the most active call was on the sell side, paired with declining implied volatility and dropping open interest, hints that options traders remain cautious or are using the spike to lock in premium rather than betting on a further surge.
Key Takeaway: Unusual Call Activity with a Hint of Skepticism
Even with the strong news catalyst and rising stock, the flow on AVGO’s Jun-20-25 255 Calls reveals that traders may be fading the news with call selling, not aggressively chasing the upside. For investors watching AVGO, the interplay between headline-driven optimism and measured options market skepticism provides a nuanced read on short-term expectations. Is the heavy call selling a sign of profit taking—or a signal that traders doubt a rapid follow-through above $255 before expiry? Only time will tell, but for now, AVGO options are pricing in less risk—despite a surge in trading interest and plenty of market buzz around the new product rollout.
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