Options market implying 6% move when Nvidia reports earnings, says Mike Khouw

Options Market Analysis - The options market implies a move of approximately 6% in Nvidia's stock price after the earnings report, aligning with the company's average move over the past eight quarters [1] - Call options are outpacing put options with significantly above-average volume, indicating bullish sentiment [1] - The most active options contracts are the 185 calls expiring next week, with significant buyer activity and institutional selling [2] Trading Strategy - The firm holds a long position in Nvidia's underlying stock [3] - Selling upside calls against the stock can generate additional premium [3] - Selling October 3rd weekly 205 calls could yield approximately $225 (two and a quarter) per contract, providing a tailwind while retaining material upside [4] Market Sentiment - Despite Nvidia's substantial run-up, the firm advises staying with winning trades until there is concrete evidence of a reversal [4]