Buy Call TSM

March 6, 2024
Sell a Third of Existing Position: Sell a Third of your TSM September 130 Calls for $22 or more.

TSM is breaking out to a new high today and looks terrific. And while I think the stock goes higher if the market is firing on all cylinders, yesterday’s weakness is why we take partial profits along the way. Let’s stick to the system and lock in a gain of approximately 70% on the second third of our trade.

To execute this trade you need to:
Sell to Close a Third of your TSM September 130 Calls

March 1, 2024
Sell a Third of Existing Position: Sell a Third of your TSM September 130 Calls for $16 or more.

TSM is breaking out to a new high today as the semiconductor/AI story continues to bloom. And while I think TSM looks great, let’s stick to the system and lock in a gain of approximately 20%, and then go for greater gains in the days/weeks to come.

To execute this trade you need to:
Sell to Close a Third of your TSM September 130 Calls.

February 13, 2024
Buy the Taiwan Semiconductor (TSM) September 130 Calls (exp. 9/20) for $15 or less.

Taiwan Semiconductor (TSM) was one of the stock stars coming out of earnings season as the stock rallied from 101 to 113 on earnings, and continued its run to a high of 135 just last week.

Today, the stock is down marginally (trading at 129) as the Nasdaq is having its first bad day in quite some time. This stock strength on a day when TSM easily could have been down meaningfully is impressive.

Also, since earnings option activity in TSM has been wildly bullish, including these trades from last week:

2/8 – Buyer of 50,000 TSM May 120 Calls for $16.50 – Stock at 131 (rolled from May 100 calls)

2/7 – Buyer of 5,000 TSM April 135/150 Bull Call Spread for $2 – Stock at 123.5

The call buying above is impressive (especially the $82 million May buy), and is a super small sample of the bullish option activity in TSM, and I am going to get involved today via a September call buy.

To execute this trade you need to:
Buy to Open the TSM September 130 Call.

The most you can lose on this trade is the premium paid, or $1,500 per call purchased.

The risks I see in this trade are pretty straightforward:

The market has been on a very strong run, and could be due to cool off.

Similarly, the semiconductors on the back of the AI hype have been red hot, and could fall if that momentum cools off.

Finally, should China start agitating for a war with Taiwan, I would have to imagine TSM would come under heavy pressure.

And while there is risk in adding TSM today, especially with the Nasdaq having its first bad day in some time, I like the risk/reward in adding a September call that can withstand short-term choppiness in a leading semiconductor.