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Todd Gordon's Taiwan Semiconductor Trade

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On CNBC's "Trading Nation", Todd Gordon of TradingAnalysis.com spoke about a bullish options strategy in Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE: TSM).

The company is going to report earnings next week and Gordon thinks the stock is going to trade higher on the event. He added that implied volatility in name is elevated around a big event like earnings. Gordon wants to exploit increased volatility ahead of the earnings by selling the July 35/34 put spread for a credit of 35 cents.

If Taiwan Semiconductor stays above $35 at the July expiration, Gordon is going to collect the whole premium. The trade is going to start to lose money below $34.65 and it can maximally lose 65 cents.

Posted-In: CNBC Todd Gordon Trading NationOptions Markets Media

 

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