OptionsHouse

Options Trading News

March 12, 2013  Tue 4:45 AM CT

TSM: SEE CHART GET CHAIN FIND STRATEGIES
Traders are positioning for a possible drop in Taiwan Semiconductor as the chip maker hovers near its highest levels in more than 12 years.

More than 3,200 April 17.50 puts traded in a heavy buying pattern yesterday afternoon for $0.45 and $0.50, according to optionMONSTER's Depth Charge system. The volume was 8 times higher than the strike's open interest of 400 contracts before the session began, so these are clearly new positions.

The puts, which lock in the price where shares can be sold, weren't tied to any stock activity identified by our scanners yesterday but could have been bought to protect gains on a long position established earlier. If not, these contracts are making an outright bearish bet that TSM will fall more than 4 percent by expiration in mid-April. (See our Education section)

TSM was down 0.78 percent yesterday to $17.77, falling below its 50-day moving average. The stock has pulled back after spiking to $19.25 on Feb. 20, its highest price since August 2000. The semiconductor sector saw sharp gains in the beginning of the year but has slowed in recent weeks, according to our researchLAB analysis tool.

Overall puts in the name outpaced puts by more than 5 to 1 yesterday.
Share this article with your friends


Related Stories

TSM

Taiwan Semi draws more put buying

February 4, 2016

The chip manufacturer is up 5 percent in the last week but was the target of heavy put buying yesterday for the second session in a row.

TSM

Put volume mounting in Taiwan Semi

February 2, 2016

The chip maker is positive despite today's market selloff, but one large trader is buying puts that expire the day after its next quarterly report.

OptionsHouse

Premium Services

Upcoming Webinar:

How to Defend Your Portfolio and Profit in a Market Selloff

http://bit.ly/1OSMWU6

Jon Najarian and Sandy Chaikin of Chaikin Analytics demonstrate how to play defense when the market is selling off. And, how to turn misery into money, whether investing in stocks or trading options.

Education & Strategy

The sweet spot

When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

View more education articles »