Nvidia Earnings: Options Market Implies 6% Move, Says Mike Khouw

Nvidia Earnings Expectations

• 🎯 The options market is currently implying a 6% move in Nvidia's stock following its upcoming earnings report.
• 📊 This implied move is consistent with the company's average stock movement after earnings over the past eight reported quarters.

Options Activity and Strategy

• 📈 Call options are seeing significant activity, outpacing puts on above-average volume.
• 🔑 The most active contracts are the 185 calls expiring next week, with both buyers and institutional sellers involved.
• 💡 A potential strategy discussed involves selling upside calls against a long stock position to generate extra premium, such as selling October 3rd weekly 205 calls for about two and a quarter.
• 🚀 This strategy aims to provide a slight tailwind while still allowing for material upside potential.

Market Sentiment and Winning Trades

• ⚠️ Despite Nvidia's significant recent run-up, the advice is to stay with winning trades until there is concrete evidence of a downturn.
• 📈 The stock has not yet shown signs of faltering, suggesting continued positive momentum.