Wall Street traders think next week’s earnings report from Nvidia is likely to give the chip stock another boost, according to one interpretation of options market pricing. A Piper Sandler research note on Thursday from Benson Durham and Melissa Turner said short-term options on Nvidia look expensive, but that high cost is tilted toward options that serve as bets the stock will rise. “What’s noteworthy is that near-term upside is the dearest, not the downside. So, expensive NVDA options in general don’t connote very much investor angst heading into the release,” the Piper Sandler report said. Nvidia is set to report fiscal second-quarter results Aug. 28 for the quarter that ended in July, and the results could serve as a gut check not only for the chipmaker, but also for the entire stock market. The stock is up 171% over the past year and is one of the three largest stocks in the S & P 500 measured by market value, along with Apple and Microsoft . Nvidia’s meteoric rise suffered a bit of a swoon this summer. The stock closed at $98.91 per share on Aug. 7, about 27% below its all-time high in June. But the stock has since erased most of those losses, closing at $123.80 per share on Thursday. NVDA YTD mountain Nvidia’s rally has been a key driver of this bull market. The market optimism about Nvidia extends beyond the immediate period after the earnings report, according to Piper Sandler. “We focused on shorter-dated options, largely on account of next week’s release. However, the rest of the surface isn’t necessarily priced fairly, either. E.g., upside is also rich over the longer haul, again strictly based on volatility forecasts (over corresponding horizons) rather than fundamental,” the note said. The Piper Sandler researchers did not take a fundamental position on Nvidia’s earnings report. There are several ways investors could use options to bet on upside for Nvidia. One of the simplest ways would be to purchase a call option with a strike price that is “out of the money.” If Nvidia rises above that strike price before the options expires, then the trade could be executed, allowing the investor to buy it at a discount. However, the market pricing described by the Piper Sandler note means that the up-front premium for this strategy would be higher than usual for a stock with Nvidia’s volatility profile. This would in turn create a higher bar for the trade to be profitable, and mean that the trade would be more costly if the option expires worthless.