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Bears bet on drop in Taiwan Semi

Chris McKhann (chris.mckhann@optionmonster.com)

Taiwan Semiconductor is in the middle of its recent range, but one large trader is betting on further losses.

optionMONSTER's Depth Charge system detected the purchase of 5,000 January 17.50 puts for the ask price of $0.65. That volume is above the strike's previous open interest was of 4,193 contracts, so this is a new position.

Because the puts are in the money , this is almost certainly an outright bearish play rather than protection on a long position. TSM was at $17.22 when the options traded, so the puts were already $0.28 in the money when they were bought. That means the contracts have just $0.37 of extrinsic value . (See our Education section)

TSM is down 0.23 percent to $17.15 in midday trading. The chip maker above $19 in October but as low as $16.68 last week.

Total option volume in the name already exceeds 6,300 so far today, more than double its full-session average for the last month. Only 113 of those contracts are calls, reflecting the day's bearish sentiment.

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