On CNBC's "Options Action," Bonawyn Eison spoke about unusually high options activity in NVIDIA Corporation (NASDAQ:NVDA), which is due to report earnings Wednesday, after the bell. The options market is implying a move of 6.5% in either direction and it moves around 2.5% on the event.
About 1,000 contracts of the February $560/$600 call spreads were bought on Tuesday for just under $10, said Eison. The trade offers a four to one payout, he added. These options were bought during the sell-off on Tuesday, explained Eison. He said that they allowed traders to define their risk while trying to catch the falling knife.
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