• 
• See all for optionMONSTER
• View Print Version

• L-3 Communications breaks key level
• Unusual ITT play exploits industry panic

• TSM 100% Rate It

One investor wants to pass the time by selling calls in Taiwan Semiconductor.

optionMONSTER's tracking systems detected a surge of activity on Friday in the April 15 and May 15 calls. The Aprils were bought for $0.15 against existing open interest, while the Mays were sold for $0.40 as a new position was initiated.

TSM fell 0.92 percent to $15.11 on Friday, so those calls were in the money. If the trade hadn't been done, the investor would have been forced to sell shares in the Taiwanese chip maker. After Friday's transaction, he or she can stay in the position for another month.

The trader also collected a credit of $0.25, on top of the income that had been previously generated by selling the April contracts. The strategy makes it possible to collect money from a position in the shares, essentially turning time into cash flow . (See our Education section)

The trade makes sense because TSM is stuck around the same level where it peaked in late 2001 and early 2002. Some chart watchers may now expect a pause as it contends with that resistance area. They apparently don't expect a big rally following the release of earnings this Thursday.

Overall option volume was 20 times greater than average in the session.

Related Options Articles

• 
  Dow Posts First Weekly Loss Since Mid-April
  5/24/2013 04:26 PM
• 
  Can Ebix Overcome the Rumors?
  5/24/2013 03:17 PM
• 
  Bulls charge into Facebook at lows
  5/24/2013 01:20 PM