Option Strategies: TSM
Hello everyone! Today i want to share some option strategies with you!
1.
$Taiwan Semiconductor Manufacturing(TSM)$ has earnings on Thursday, Oct. 17 before market open.
Pegs expected move at ~5%.
Our trades:
- Sell (write) puts in the 165 to 170 strike range. Oct 18th or 25th expiration.
- Buy a 200/205 call spread Oct 18 exp as a lotto bet to capture upside if TSM pumps for earnings (strikes subject to change based on today's price action)
TSM is high on our long-term buy list considering the fact that they own a big share of their market and stand to benefit greatly from the growth of technology and usage of semiconductors in many use cases (most notably AI). Also, they recently reported solid revenue and their fundamentals look good based on
Quant model analysis.
Our optionselling trade would be for assignment of shares. We are looking to re-enter as we just sold our long position the other day to lock in profit before earnings.
Points to Consider:
- Expected move places downside to 177 and upside to 197 (subject to change based on today's price action)
- Tech stocks typically tend to move more than expected move
- Volume point-of-control and strong volume support around 170
Post-Trade Actions:
- The put is cash-secured and the goal is assignment of shares at the strike price sold
- If we were trading naked puts and don't want shares, then we would hedge by buying puts at a strike below the strike we sold (for example, sell the 170 and buy the 165 put strikes to create a hedged spread)
Follow me to learn more about analysis!!
https://x.com/Selling4Premium
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.
