The 25-year-old's contract at Porto ends at the end of the season, and Porto are currently trying to convince him to sign a new deal at the club.
The Brazilian has been at Porto since 2016, scoring 17 goals and providing 43 assists in 165 appearances for the Portuguese club.
Arsenal and Roma are monitoring Otavio's contract situation, and according to Italian journalist Nicolo Schira, the attacking midfielder will not sign a new contract with Porto, and as a result Arsenal and Roma are thinking about making a move for him.
It is still uncertain whether Porto will try to get him to sign a new contract at the club, or whether they will opt to let him leave on a free transfer.
This season, Otavio has scored three goals and six assists in 19 appearances in all competitions, playing in numerous positions across midfielder, from left midfield, to right midfield, and even central midfield.
Roma have plenty of depth in midfield, but plenty of their stars are linked with moves away, whilst Arsenal badly need some form of creativity coming from midfield.