To The Moon

In the past two weeks,$Taiwan Semiconductor Manufacturing (TSM) $ fluctuated and strengthened in the high range, but the intraday fluctuation was significantly amplified. Near the latest trading time on February 11, the stock price was about 361.91 US dollars, and the intraday high and low range was about 356.42-367.33 US dollars, indicating that bulls are still dominant, but the high divergence is increasing and the flexibility of the pullback/retracement is also rising.

In terms of news, the most critical incremental information in the near future comes from the company's revenue disclosed in January 2026: approximately NT $401.26 billion, 36.8% year-on-year and 19.8% month-on-month. This data is generally interpreted by the market as the continued strong demand for advanced manufacturing processes and AI, which also strengthens the main expectation that "AI investment is still advancing". At the same time, some media reports have also linked it with higher capital expenditure expectations, as well as uncertainties related to U.S. tariff/industrial policies and potentially positive discussions, making short-term sentiment more susceptible to headline and amplifying fluctuations.

In this environment of "strong fundamentals, but prices have reflected more optimistic expectations", the callback risk of technology stocks mainly comes from the valuation and sentiment level: on the one hand, the market has higher requirements for "continuing to exceed expectations" at the high stage, and any marginal weakening of guidance, order rhythm or macro variables (interest rate, risk appetite) may trigger profit-taking; On the other hand, some technology segments of the U.S. stock market (such as software) have recently undergone obvious emotional adjustments, reflecting that funds are more inclined to reprice quickly at high levels.

TSM Bear Call Credit Spread Strategy

1. Strategy structure

Investors in$Taiwan Semiconductor Manufacturing (TSM) $Build a Bear Call Spread strategy on options.

This strategy is a bearish/shock strategy that collects premium, limited returns, and limited risks. It is suitable for judging the situation that it is difficult for the stock price to effectively break through the upper pressure area, maintain sideways or fall back before expiration.

1 ️ ⃣ Sell lower strike price Call (main source of income)

• Sell 1 Call with strike price K ₁ = $365

• Premium received = $4.40/share

This Call is closer to the current price and is the main source of revenue for Strategic premium. As long as the expiration price is ≤ $365, the option lapses and the investor retains all premium rights.

2 ️ ⃣ Buy higher strike price Call (control upside risk)

• Buy 1 Call with a strike price of K ₂ = $367.5

• Premium paid = $3.45/share

This Call is used to limit the risk when the stock price rises sharply and avoid the amplified loss caused by naked selling Call.

3 ️ ⃣ Call-side net income (per share)

Net premium revenue was:

4.40 − 3.45 = $0.95/share

This is the maximum available benefit of this strategy.

2. Maximum profit

When the TSM expiration price is ≤ $365:

• Both Calls are out of the price

• All option lapse investors retain full net premium:

• Maximum profit (per share) = $0.95

• Each contract (100 shares) = $95 Conditions of occurrence: expiration price ≤ $365

3. Maximum loss

When the expiration price is ≥ $367.5:

• Both Calls are in-the-money

• Strike spread is fully locked Calculated: Strike spread = 367.5 − 365 = $2.5 Maximum loss (per share) = Strike spread − Net premium = 2.5 − 0.95 = $1.55/share

• Maximum loss per contract = $155 Conditions of occurrence: Expiration price ≥ $367.5

4. Break-even point

Formula:

Sell Call Strike Price + Net premium

= 365 + 0.95

= $365.95

Maturity judgment:

• Price ≤ 365. 95 → Profit

• Price = 365.95 → No profit, no loss

• Price ≥ 365. 95 → Loss

5. Strategic characteristics and applicable situations

Strategy Characteristics

• Clear bearish/shock strategy

• Charge premium structure, time value benefits investors

• Maximum profit and maximum loss are determined after opening a position

• Compared with naked selling Call, the upside risk is capped

Applicable situations

When investors judge:

• Stock price is under clear pressure near 365

• It is difficult to break above 367.5 in the short term

• Hope to obtain stable income by selling time value

• Or establish a closing premium strategy when the implied volatility is high

The essence of this structure is:

"Use the risk of $1.55 to gain the benefit of $0.95",

The winning rate is usually high, but once the pressure level is broken upward, the loss will accelerate (but the upper limit has been capped), so it is suitable for use when the shock is weak or the upper pressure is clear.