Taiwan Semiconductor Option Trade has a Profit Zone Between $220 and $250

The shares of Taiwan Semiductor (TSM) show great price procedures and may continue to grind in the period that reaches profits on July 17.

One way to take advantage of this directional opinion is through the spread of a Qatari call.

Let’s take an example of an example using Taiwan semiconductors.

Taiwan semi -connector seedlings, for example, is a proliferation

The trade I am looking for is to sell a July 18 call at a $ 240 strike and buy a August 1 call at a strike price of $ 245.

As of the closure of yesterday, the July 18 call can be sold for about $ 1.90, and August 1 call can be purchased for 2.40.

The trade will lead to a net discount of 50 dollars.

The maximum risk of trade is calculated by taking the difference in the spread (5) multiplied by 100 and adding the payment premium ($ 50). This gives the maximum loss of $ 550.

The maximum possible profit is about $ 550, which will happen if TSM is closed at $ 240 on July 18.

Trade has a nice profit area ranging from $ 220 and $ 250.

The goal of the return of about 10-15 % is logical and I will put a similar loss.

The worst case scenario is a sharp gathering in the TSM arrow early in trade. For this reason, if the stock rises above 240 dollars in the next few days, I will also think about closing the trade early to reduce losses.

The perfect scenario is a slow -reaching grinding to the level of $ 240 around mid -July.

The initial trade prepared contains Delta of 1, which means that the situation is almost equal to having one share of TSM shares. Note that this delta number can change significantly with the start of the move.

Below is the fee returned with the blue line, which represents profit or loss at the end of the validity and purple line is trade as of today.

Provided that the TSM shares remain less than $ 240 next week or so, the trade should be fine.

Taiwan semiconductor details

The BARCART artistic opinion is 56 % purchase with short -term expectations to maintain the current direction.

The semiconductor manufacturer in Taiwan is the largest compact integrated circles in the world.

As a mascara, the company manufactures ICS for its customers based on their IC designs using advanced production processes.