Shares of Taiwan Semiconductor Manufacturing Co (NYSE:TSM) are up 2% to trade at $305.55 at last check, after sector peer Nvidia (NVDA) encouraged the chipmaker to boost production of its H200 AI chips to meet rising demand from China.
After pulling back from its Dec. 10 record high of $313.98, TSM stabilized above the $300 level, notching six-straight positive sessions along the way. The equity is up 127% from its Apr. 9, year-to-date low of $134.25 and is looking to close out 2025 with a healthy 54.6% gain.
Options traders lean bearish, per TSM's Schaeffer's put/call open interest ratio (SOIR) of 2.22 that ranks in the 98th percentile of its annual range. An unwinding of this pessimism could result in additional tailwinds for the equity.
Drilling down to today's options activity, 42,000 calls have crossed the tape -- double the volume that is typically seen at this point -- compared to 33,000 puts. Most active is the weekly 1/2 307.50-strike call, where new positions are currently being bought to open.
Meanwhile, the equity's Schaeffer's Volatility Index (SVI) of 35% stands higher than just 9% of all other readings from the past year, implying near-term option traders are now pricing in relatively low volatility expectations.
