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The options market gives us an inkling of the sentiments surrounding a stock. The one for AI chipmaker Broadcom (AVGO), before its Q2 print, signaled a bullish overtone. However, straddles on the company's stock were also trading heavily. Straddles are basically a hedge against a volatile price movement, either on the upside or downside.
These straddle owners must be relatively happy after shares of Broadcom plummeted 14% in after-hours and early Thursday trading, as investors were not enthused about the company's software sales for the quarter, which came in below estimates. This, I reckon, could be one of the best opportunities to buy the stock cheaply.
