Chip Stock Soars After Beat-and-Raise

TSM call traders are coming out in droves this morning

Managing Editor
Oct 19, 2023 at 10:38 AM
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Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) is propping up the chip sector this morning, last seen 4% higher to trade at $93.17. The company reported adjusted third-quarter earnings of $1.29 per share, higher than the $1.17 per share estimates from analysts. Third-quarter revenue of $17.28 billion also topped forecasts.

The big kicker driving the stock though is raised guidance for the fourth quarter, as well as comments from CEO C.C. Wei that "we can expect 2024 to be a healthy growth year for TSMC." TSM is on track for its best single-session pop since June 12. The shares are now 24% higher in 2023, but remain a ways off their June 13 annual high of $110.69. 

Options traders are loading up on calls today. At last check, over 77,000 calls have changed hands, volume that's 13 times the average intraday amount and pacing to sit in the 99th percentile of its annual range. New positions are being bought to open at the October 97 call, while the October 80 put is seeing notable sell-to-open activity. 

Options are an intriguing route at the moment, per the equity's Schaeffer's Volatility Scorecard (SVS) tally of 92 out of 100.This implies TSM tends to outperform said volatility expectations.


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