TSM Hits Record High as Options Volume Takes Off

Overall options volume is pacing for the 99th percentile of its annual range

Deputy Editor
Dec 1, 2020 at 2:12 PM
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The shares of Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM) were last seen up 5.7% to trade at a new record high of $102.58. The stock has been carving out a channel of higher highs since early June, with the 60-day moving average serving as a consistent floor for pullbacks. In these last six months, the equity is up 97.7%. 

TSM Dec 1

Today's positive price action has the options pits buzzing, with 92,000 calls and 17,000 puts across the tape so far -- four times what's typically at this point with overall options volume pacing for the 99th percentile of its annual range. The December 108 call is the most popular by far, with new positions being opened there. 

This preference for calls is keeping with TSM's norm as of late, with 5.23 calls bought for every put in the last 10 weeks at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). These premiums are relatively well-priced at the moment too, per the stock's Schaeffer's Volatility Index (SVI) of 38%, which stands higher than 26% of all other readings in its annual range. This implies that options players are pricing in relatively low volatility expectations at the moment.


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