Mike Khouw Sees Unusual Options Activity In Nvidia

On CNBC's "Options Action," Mike Khouw said calls outpaced puts in Nvidia Corporation NVDA on Tuesday.

The company is going to report earnings on Wednesday after the market closes and the options market is implying a move of 7% in either direction. The stock moved 8% on average over the last 8 quarters, explained Khouw.

During the session on Wednesday, he saw some activity in the November $550 calls. Around 3,000 contracts were traded for $12.50, said Khouw. The trade breaks even at $562.50 or around 5% above the closing price on Tuesday.