To The Moon

$Nvidia (NVDA)$

Based on Thursday's options flows, it's clear that Taiwan Semiconductor's earnings had a more pronounced impact on expectations for $Nvidia (NVDA)$.

Call opening volumes were staggering, reflecting fairly bullish sentiment that could extend into year-end.

Two key trades stood out: a bullish call spread and outright call selling:

Buy $NVDA 20241220 180.0 CALL$ , total volume 98,500 contracts
Sell $NVDA 20241220 190.0 CALL$ , total volume 92,900 contracts

And

Sell $NVDA 20250117 170.0 CALL$ , total volume 57,700 contracts

First, the call spread is undoubtedly a bullish position, pricing in Nvidia hitting $180 by late December but capping upside below $190. The institutional-style flows imply a hefty $20+ million premium outlay - a sizable bullish bet.

The other large trade was an outright sale of the $170 calls expiring in January ($NVDA 20250117 170.0 CALL$ ), positioning for limited upside below $170 over the next few months. Not ideal for existing call buyers, but neutral to positive for shareholders and put sellers given the 20%+ potential upside from current $140 levels.

For now, we can maintain stock holdings coupled with a defensive call and put spread overlay.

$Taiwan Semiconductor (TSM)$

Institutional traders rolled their $TSM$ bullish bets higher following strong earnings, buying the $TSM 20250221 195.0 CALL$  for February expiration. Roll volumes and premiums paid were elevated versus prior cycles.

The $195 break-even price leaves around 15% potential upside from current levels. Per typical patterns, TSM shares should orbit the $195 strike, allowing for opportunistic put sales if desired.