Options Traders Bet TSMC Shares Will Extend Gains After Results

Options traders are betting that Taiwan Semiconductor Manufacturing Co.’s stock rally has more to run as optimism grows that its upcoming earnings will alleviate market concerns.

The cost of hedging against declines in the stock has fallen to its lowest level since January relative to bullish wagers, according to data compiled by Bloomberg on the more liquid US-traded options. The world-leading chip foundry reported better-than-expected quarterly revenue growth last week, and analysts now expect TSMC will raise its full-year guidance and hint at further product price hikes when it releases its detailed results Thursday.

TSMC’s Taipei-listed stock has ...