I generally avoid buying calls or puts just days ahead of earnings. Often there is a hefty premium in these options contracts that does not give you a good risk vs reward for making a profit. However, that is not the case in my humble opinion on NVIDIA Corporation (NASDAQ:NVDA). This stock has sharp pull back written all over it going into earnings on Thursday, August 11th, 2016, after the stock market closes. The semiconductor company is expected to report earnings of $0.37 on revenue of $1.35 billion. 1. Since their last earnings report on May 12th, 2016, Nvidia has soared from $35.75 to a high today of $59.14. That is a whopping gain of 65.5% in just three months (one quarter). While insane, this alone is not a good enough reason to buy puts going into earnings. 2. The monthly and weekly charts both have time counts. 

These are cycle type events that are extremely rare. To see them on two different time frames is even more rare. When the time count is coming on a straight up move to new all-time highs on a stock or market, the odds heavily favor a reversal. 3. Then monthly trend line connecting 2002, 2007 to the current highs in 2016. I think it is worth noting that the last major pivot high was made in 2007 before the market crashed. I am looking to buy the October 21st, 2016 puts, strike $55.00. They are currently trading at $2.54.