On CNBC's "Options Action," Mike Khouw shared with the viewers his way to trade Uber Technologies Inc (NYSE:UBER) ahead of earnings. Uber reports on August 6 and the options market is implying a move of around 9% in either direction.

Khouw finds it extraordinary that the stock is trading higher on the year inspite of the impact of Covid-19 on its business. Uber also has other issues, like big negative cash flow and anti-trust concerns.

Khouw has a Neutral to Bearish view on the stock so he wants to sell the August $30.50 call and buy the August $31.50 call for a total credit of 40 cents.

If the stock stays below $30.90 at the August 21 expiration, Khouw is expected to collect the premium, which is his maximal profit. He can at most lose 60 cents per share with this trade.