Chip manufacturing giant Nvidia is once again at the forefront of market attention, with its upcoming earnings report generating significant buzz. This heightened interest is partly driven by renewed speculation surrounding a potential U.S.-China trade agreement, which could pave the way for Nvidia to resume selling its advanced chips to Chinese enterprises.

The company’s stock has experienced a remarkable ascent, climbing over 20% since May 5th. A notable 4.4% rally occurred recently following reports suggesting that U.S. regulators have cleared a number of Chinese firms to acquire Nvidia’s H200 processors, crucial components for artificial intelligence applications. This surge has propelled Nvidia’s market capitalization to nearly $5.7 trillion, a substantial increase from approximately $4.7 trillion just last Tuesday.

This rapid appreciation in share price has had a considerable impact on the options market. Many bullish traders who purchased call options in anticipation of the current quarter’s earnings are now finding their positions “in the money,” meaning the stock is trading above their strike prices. This scenario has amplified leverage within the options market, particularly as key options contracts approach their expiration dates this Friday and into the following week. The options landscape currently shows roughly $40 billion in options delta trading against a total premium of just $4 billion.

Attention is now firmly fixed on Nvidia’s earnings announcement, scheduled for next Wednesday, May 20, after market close. Traders are bracing for a significant price movement, reflected in an implied volatility for the earnings event nearing 7.5%. This figure is more than double the median movement observed after the company’s past four quarterly reports, underscoring the high expectations and potential for market shifts.