$TSM call prices spike

$TSM call prices spike


Option traders are scoring big gains in Taiwan Semiconductor Manufacturing (TSM) today.

On May 23Market Rebellion’s Unusual Option Activity Service found that 4,400 July $170 calls were bought for $4.55 to $5.10 with shares at $158.84. This was clearly fresh buying, as open interest in the contract was just 2,487 before the activity appeared.

Those calls have traded for as much as $20.00 today, a 292.16% return, while the stock rose 16.11% at the same time, showing how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

TSM was last up on day by 1.46% at $179.83.

Ready to start trading? Try Unusual Option Activity Essential. Learn how you can follow the “smart money” with a fresh UOA trade idea each week – including technical levels so that you know how to manage each trade!

Subscribe to Rebel Roundup for your weekly digest of market highlights and free trading lessons.
We’re on a mission to empower retail traders with the tools they need to succeed.

Join a growing community of traders with Market Rebellion

Join the thousands of users daily!