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

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Gavin McMasterWed, Jun 25, 2025, 12:00 PM 3 min readOptions on cell phone by Trismegist san via ShutterstockTaiwan Semiconductor (TSM) stock is showing impressive price action and it could continue to grind higher in the lead up to earnings on July 17th.One way to take advantage of that directional opinion is via a diagonal call spread.$2M Insider Buy on Robinhood Makes History: Should You Buy HOOD Stock, Too?Carnival Corp's Free Cash Flow Surges - CCL Stock Looks Deeply UndervaluedExelon Corp (EXC) Draws Bullish Options Bets After Unusual Volume SpikeOur exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!Let’s look at an example using Taiwan Semiconductor.Taiwan Semiconductor Diagonal Put Spread ExampleThe trade I’m looking at is selling a July 18 call with a strike price of $240 and buying an August 1 call with a strike price of $245.As of yesterday’s close, the July 18 call could be sold for around $1.90 and the August 1st call could be bought for 2.40.The trade would result in a net debit of $50.The maximum risk on the trade is calculated by taking the difference in the spread (5) multiplied by 100 and adding the premium paid ($50). That gives a maximum loss of $550.The maximum potential gain is around $550 which would occur if TSM closes right at $240 on July 18.The trade has a nice profit zone in between $220 and $250.Aiming for a return of around 10-15% makes sense and I would set a similar stop loss.The worst-case scenario is a sharp rally in TSM stock early in the trade. For this reason, if the stock rises above $240 in the next few days, I would also consider closing the trade early to minimize losses.The ideal scenario is a slow grind higher up to the $240 level around mid-July.The initial trade set up has a delta of 1 meaning the position is roughly equivalent to owning 1 share of TSM stock. Note that this delta number can change significantly as the stock starts to move.Below is the payoff graph with the blue line representing the profit or loss at expiration and the purple line being the trade as of today.A graph with lines and dots AI-generated content may be incorrect.Provided TSM stock stays below $240 in the next week or so, the trade should be ok.Taiwan Semiconductor Company DetailsThe Barchart Technical Opinion rating is a 56% Buy with a Strengthening short term outlook on maintaining the current direction.Taiwan Semiconductor Manufacturer Co is the world's largest dedicated integrated circuit foundry.As a foundry, the Company manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,139.29 +47.13 (+0.77%)Dow 3043,353.19 +370.76 (+0.86%)Nasdaq20,167.71 +194.15 (+0.97%)Russell 20002,165.79 +29.61 (+1.39%)VIX16.44 -0.32 (-1.91%)Gold3,343.10 0.00 (0.00%)PortfolioSign in to access your portfolioSign inTop gainersCORZ Core Scientific, Inc. 16.65 +4.35 (+35.33%)QS QuantumScape Corporation 7.65 +1.97 (+34.86%)HSAI Hesai Group 22.96 +3.58 (+18.50%)AVAV AeroVironment, Inc. 268.46 +33.52 (+14.27%)ENPH Enphase Energy, Inc. 42.82 +4.71 (+12.36%)Top losersEQIX Equinix, Inc. 758.20 -66.11 (-8.02%)VSEC VSE Corporation 126.86 -8.98 (-6.61%)XPEV XPeng Inc. 17.99 -1.22 (-6.33%)RELY Remitly Global, Inc. 18.82 -0.80 (-4.05%)ETSY Etsy, Inc. 50.88 -2.17 (-4.09%)Most activeQS QuantumScape Corporation 7.65 +1.97 (+34.86%)NVDA NVIDIA Corporation 155.40 +1.09 (+0.71%)LCID Lucid Group, Inc. 2.1950 +0.0550 (+2.57%)NU Nu Holdings Ltd. 13.35 +0.12 (+0.87%)CORZ Core Scientific, Inc. 16.65 +4.35 (+35.33%)Earnings eventsTrending tickersCYN Cyngn Inc. 11.98 +6.97 (+138.92%)CORZ Core Scientific, Inc. 16.64 +4.34 (+35.28%)ALT Altimmune, Inc. 3.6750 -4.0350 (-52.30%)RKLB Rocket Lab Corporation 36.38 +4.03 (+12.44%)^GSPC S&P 500 6,139.29 +47.13 (+0.77%)Top economic events