Taiwan Semiconductor Manufacturing Company Ltd. closed at $419.48, dipping 0.22%. Large options trades on the day were dominated by a significant short put position, signaling bullish conviction through premium collection on the expectation of underlying stability or strength.

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Options Indicators

TSM’s implied volatility stands at 56.72%, and with an IV percentile of 93.63%, current option volatility is clearly in an elevated regime, indicating that options are priced expensively relative to their own recent history.

At the same time, the IV/HV ratio of 0.96 suggests implied volatility is roughly in line with, and slightly below, realized volatility, so while premiums are rich on a historical percentile basis, they are not dramatically overstated versus actual underlying movement.

The Call/Put volume ratio is 0.88.

Large Trades

A PUT sale worth $14.70 million was the largest displayed trade of the day, with 3,000 contracts sold at the 400.0 strike expiring on 2027-02-19.

With TSM referenced at $419.48, this put was out of the money at execution, making the trade a moderately bullish short-put position.

Strategically, the seller is collecting premium while expressing confidence that the stock will stay above $400.0 through expiration, or at least remain firm enough that the option expires worthless.

This type of trade typically reflects a willingness to accumulate shares at a lower effective entry level if assigned, while monetizing a constructive outlook in the meantime.

A CALL sale worth $8.27 million was the second major displayed trade, involving 3,050 contracts sold at the 670.0 strike expiring on 2027-06-17.

Since the current stock reference of $419.48 is well below the strike, the call was deeply out of the money, so the trade represents a bearish-to-neutral premium-selling stance rather than an outright downside bet.

The strategic intent is premium collection, with the seller effectively expressing the view that TSM is unlikely to rally anywhere near $670.0 by expiration.

While not aggressively bearish in the near term, this large call overwrite signals skepticism toward extreme upside over the long-dated horizon.

Overall sentiment in TSM large trades was clearly bullish, with total bullish flow of $28.29 million versus bearish flow of $8.39 million, leaving a net bullish difference of $19.90 million.

The directional takeaway is decisively constructive, as the dominant money was concentrated in sold out-of-the-money puts, a structure commonly associated with confidence in downside support and a willingness to earn premium on a stable-to-rising stock.

Although there was a sizable out-of-the-money call sale that capped some long-term upside expectations, the broader large-trade profile still points to investors leaning bullish on TSM rather than positioning for material weakness.

Strategy Reference

For premium sellers seeking low assignment probability, a short put at a strike like $300.0, well below the current price, could be considered, while a bull put spread using the $400.0 and $380.0 strikes would define risk and reduce margin requirements for those with a moderately bullish view.