To The Moon

With another major player in the semiconductor sector, $Broadcom(AVGO)$ giving its earnings after market close on 04 Sep 2025, we saw that the shares gained over 4% in after-hours trading. as Broadcom delivered a strong fiscal Q3 2025, with results driven by AI networking strength and continued VMware integration.

Revenue and EPS both topped expectations, reinforcing the company’s role as an essential player in the AI infrastructure buildout. Management also raised full-year guidance, citing robust AI chip demand and accelerating adoption of VMware’s software stack. Shares gained over 4% in after-hours trading.

I am holding Broadcom for long term so I would like to explore how we can trade opportunities with option for Broadcom.

Buying stocks, whether "chasing the high" or "buying the dip," is a more traditional, long-term investment strategy.

When you buy a stock, you become a part-owner of the company. Your investment does not expire. You can hold it for years or even decades, benefiting from any long-term growth. The risk with this approach is tied to the company's long-term success. While a stock's value can fluctuate in the short term, you have the flexibility to ride out market downturns.

For instance, if you buy the dip on NVDA, you're betting that the company's fundamentals will lead to a higher stock price in the future, regardless of short-term volatility. This strategy is generally less risky and more suitable for investors with a longer time horizon.

This is the strategy for investors who have not yet own $NVIDIA(NVDA)$ shares, for investors like myself, I am holding Nvidia long-term.

Ultimately, the best choice depends on whether you are a trader looking for short-term gains and comfortable with the risk of losing your entire investment, or an investor focused on long-term wealth building and comfortable with riding out volatility.

Hence, in this article I would like to share how I will be doing strategic positioning and bull put spread construction for both Broadcom (AVGO) and Nvidia (NVDA) with October 10, 2025 expiration.

Strategic Positioning: AVGO vs. NVDA

AVGO – “Chase the High”?

• Current Price: ~$297

• October Forecast: High of $342, average ~$306

• Momentum: Golden cross confirmed, MACD +7.2, strong AI chip orders ($10B from a mystery client)

• Risk: 30% China exposure, tariff sensitivity

• Convexity: High—AI infrastructure tailwinds, custom chip demand, and cloud partnerships

Verdict: AVGO is in breakout mode. Chasing strength makes sense if paired with defined risk structures like bull put spreads or call diagonals.

NVDA – “Buy the Dip”?

• Current Price: ~$170

• October Forecast: High of $208, average ~$183

• Momentum: RSI ~57, MACD crossover stabilizing, oversold bounce potential

• Risk: China export restrictions (H20 chip), tariff volatility

• Convexity: Dominant AI GPU share (94%), hyperscaler demand, Blackwell ramp

Verdict: NVDA is consolidating after a pullback. Buying the dip is viable, especially with bullish structures that benefit from vol compression and time decay.

In the next section, I would be sharing on how I plan to do the Bull Put Spread structures for AVGO and NVDA.

Bull Put Spread Structures (Oct 10, 2025 Expiration)

AVGO Bull Put Spread

• Sell: $270 Put

• Buy: $250 Put

• Premium Collected: ~$6.80

• Max Loss: $13.20

• Max Gain: $6.80

• Breakeven: ~$263.20

Rationale: AVGO’s strong earnings, AI tailwinds, and technical breakout suggest support above $270. This spread profits if AVGO stays above $270.

NVDA Bull Put Spread

• Sell: $160 Put

• Buy: $140 Put

• Premium Collected: ~$5.40

• Max Loss: $14.60

• Max Gain: $5.40

• Breakeven: ~$154.60

Rationale: NVDA’s dip-buying thesis aligns with this structure. You’re betting NVDA holds above $160 as AI demand and GPU dominance stabilize sentiment.

In the next section, we need to simulate how these bull put spreads on AVGO and NVDA (Oct 10, 2025 expiration) behave under two macro shock regimes—one CPI-driven and one VIX-driven.

These simulations will help us visualize risk/reward convexity and stress-test margin of safety.

Setup Recap

AVGO Bull Put Spread

• Sell $270 Put, Buy $250 Put

• Net Credit: ~$6.80

• Max Loss: $13.20

• Breakeven: $263.20

• Current Price: ~$297

NVDA Bull Put Spread

• Sell $160 Put, Buy $140 Put

• Net Credit: ~$5.40

• Max Loss: $14.60

• Breakeven: $154.60

• Current Price: ~$170

Scenario 1: CPI Surprise → Dovish Pivot

Event: CPI prints at 2.7%, Fed signals rate cut Market Reaction:

• VIX drops to 14 (2025 low)

• S&P 500 hits ATH

• Tech and AI rally sharply

• AVGO and NVDA surge

AVGO Simulation

Outcome: Spread expires fully profitable. Vol compression boosts theta decay. Consider rolling up strikes or adding call diagonals.

NVDA Simulation

Outcome: Spread expires fully profitable. Consider layering short puts or converting to put ratio spreads for added convexity.

Scenario 2: VIX Spike → Policy Shock or Geopolitical Risk

Event: Fed surprises with no cut, CPI revised upward Market Reaction:

• VIX spikes to 28

• Risk assets sell off

• Tech under pressure

• AVGO and NVDA drop

AVGO Simulation

Outcome: Spread risks breach. Consider hedging with long puts or rolling down strikes to reduce delta exposure.

NVDA Simulation

Outcome: Spread risks full loss. Consider converting to bear put spreads or adding long vol overlays.

Strategic Takeaways

• CPI Dovish: Ride theta, consider rolling up or adding bullish overlays

• VIX Spike: Hedge downside, reduce exposure, or pivot to long vol structures

• Dashboard Extension: We can layer these simulations into your macro-responsive allocation engine with heatmaps for margin of safety and convexity zones

Summary

For long-term investors holding Broadcom and Nvidia, playing options can be a strategic way to manage risk and generate additional income.

One common strategy is to sell covered calls. By selling call options on the shares you already own, you collect a premium, which provides a small, consistent income stream. This can lower your cost basis and provide a small buffer against a slight stock price drop. The trade-off is that you cap your potential upside; if the stock price surges past the option's strike price, your shares may be "called away" (sold at the strike price), and you miss out on further gains.

Another strategy is to buy protective puts. This is essentially buying insurance for your portfolio. By purchasing put options on your shares, you gain the right to sell them at a predetermined strike price, protecting you from a significant downturn. While this comes at a cost (the premium), it provides peace of mind and allows you to hold through periods of high volatility without panic-selling. This is especially useful for highly volatile stocks like NVDA and AVGO, where a sudden price drop could erase years of gains.

Appreciate if you could share your thoughts in the comment section whether you think it would be better to have protective puts on AVGO and NVDA while also considering VIX and CPI influence.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.