Option Trade On TSMC Stock Could Return 33% In About 3 Weeks

Blockhead01-29

Taiwan Semiconductor (TSM) is showing high implied volatility with a reading of 40.73% compared to a 12-month low of 26.13% and a 12-month high of 60.02%. That gives TSMC stock an IV percentile of 53%...

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Franklin Technology A (acc) SGD-H1","start_time":0,"source_url":"https://www.investors.com/research/options/tsmc-stock-taiwan-semiconductor-stock-option-trading/","article_id":"2507563607","we_media_id":null,"thumbnails":["https://www.investors.com/wp-content/uploads/2019/04/Stock-TaiwanSemiconductorMfg-01-company-150x150.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2507563607","pubTimestamp":1738157453,"columns":[],"sourceInfo":{"source_id":"investor_business_daily_highlight","name":"Investor’s Business Daily"},"weMediaInfo":null,"summary":"This iron condor trade on Taiwan Semiconductor has the potential to return 33% if the stock price stays between 183.75 and 228.75.","collect":0,"end_time":0,"defaultTopTitle":"investors.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1","BK4581":"高盛持仓","LU0823421416.USD":"BNP PARIBAS DISRUPTIVE TECHNOLOGY \"C\" (USD) INC","LU2125154778.USD":"ALLSPRING GLOBAL EQUITY ENHANCED INCOME \"A\" (USD) INC","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","LU0109392836.USD":"富兰克林科技股A","LU0572939691.SGD":"Janus Henderson Horizon Asian Dividend Income A2 SGD","IE00BFXG0V08.USD":"BNY MELLON GLOBAL LEADERS \"B\" (USD) ACC","LU2506951792.HKD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (HKDHDG)       ACC","LU1267930813.SGD":"FRANKLIN TEMPLETON SHARIAH GLOBAL EQUITY \"AS\" (SGD) ACC","LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","IE00BYQQ9H92.USD":"BNY MELLON GLOBAL LEADERS \"A\" (USD) ACC","LU2125154935.USD":"ALLSPRING (LUX) WF GLOBAL EQUITY ENHANCED INCOME \"I\" (USD) INC","LU0488056044.USD":"Allianz Asian Multi Income Plus Cl AM DIS USD","LU0384037296.USD":"ALLIANZ ASIAN MULTI INCOME PLUS \"AT\" (USD) ACC","BK4591":"室温超导概念","LU1282649810.SGD":"Allianz Asian Multi Income Plus Cl AMg DIS H2-SGD","LU1282649067.USD":"ALLIANZ ASIAN MULTI INCOME PLUS \"AMG\" (USD) INC A","LU2294711713.HKD":"BNP PARIBAS ENERGY TRANSITION \"C\" (HKD) ACC","LU0823414478.USD":"法巴经典能源转换基金","IE00BQXX3D17.EUR":"GUINNESS GLOBAL INNOVATORS \"C\" (EUR) ACC","BK4554":"元宇宙及AR概念","LU2087625088.SGD":"ALLSPRING  US ALL CAP GROWTH \"A\" (SGDHDG) ACC","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","03145":"华夏亚洲高息股","TSM":"台积电","LU1868837722.USD":"CT (LUX) I GLOBAL EMERGING MARKET EQUITIES \"2\" (USD) ACC","IE00BQXX3F31.USD":"GUINNESS GLOBAL INNOVATORS \"C\" (USD) ACC","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1508157978.USD":"BSF BLACKROCK SYSTEMATIC ASIA PACIFIC EQUITY ABSOLUTE RETURN \"A\" (USD) ACC","LU2133065610.SGD":"JPMorgan Investment Funds - 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Using the Feb. 21 expiry, we could sell the 185 put and buy the 180 put. That spread could be sold for around $0.75 late Tuesday.\nThen the bear call spread could be placed by selling the 227.50 call and buying the 232.50 call. This spread could be sold for around $0.50.\nTSMC Stock Trade Generates $125\nIn total, the iron condor will generate around $125 in premium.\n\nThe profit zone ranges between 183.75 and 228.75. You calculate it by taking the short strikes and adding or subtracting the premium received.\nThis is quite a wide range for a stock like Taiwan Semiconductor.\nBecause both spreads are 5 wide, the maximum risk in the trade is 5-1.25 x 100 = $375.\nTherefore, if we take the premium ($125) divided by the maximum risk ($375), this iron condor trade has the potential to return 33.33%.\nIf price action stabilizes, iron condors will work well. However, if Taiwan Semiconductor makes a big move, the trade will suffer losses.\nManaging TSMC Stock Option Trade\nOne way to set a stop loss for an iron condor is based on the premium received. In this case, we received $125, so could set a stop equal to the premium of $125.\nNote that Taiwan Semiconductor reported earnings in mid-January, so this trade does not have the risk of an earnings-related move.\nAccording to the IBD Stock Checkup, TSMC stock is ranked No. 1 in its industry group. It has a Composite Rating of 92, an EPS Rating of 98 and a Relative Strength Rating of 90.\nPlease remember that options are risky, and investors can lose 100% of their investment.\nThis article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.\nGavin McMaster has a Masters in Applied Finance and Investment. He specializes in income trading using options, is very conservative in his style and believes patience in waiting for the best setups is the key to successful trading. Follow him on X/Twitter at @OptiontradinIQ\nYOU MIGHT ALSO LIKE:\nWalmart Stock Is A Dividend King. Here's How To Increase The Yield Even More.\nBank Of America: How A Long-Term Covered Call Improves Your Yield\nUse Options Leverage To Invest In Streaking Arista Stock\nNvidia Option Trade Offers 8% Discount As Stock Tries To Firm Up","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.2","shortVersion":"4.30.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2507563607"}