Unusual Options Activity: Palantir Technologies (PLTR)

Shares of big data analysis company Palantir Technologies (PLTR) have soared over 50 percent in the past month. One trader is betting that shares will give up some of that gain in the coming weeks.

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  • That’s based on the June 16th $12.50 puts. With 21 days until expiration, 3,924 contracts traded compared to a prior open interest of 122, for a 32-fold rise in volume on the trade. The buyer of the puts paid $0.77 to make the bearish bet.

    Palantir last traded at about $12.60, so this is an at-the-money trade. Shares have a 52-week high of $13.42, but a low under $6, so they’re near the high end of their range.

    The company is moving towards profitability, but the real pop in shares over the past few weeks has come as the company has mentioned plans to increase its use of artificial intelligence. Given that interest that investors have shown in shares, it’s possible that the stock pulls back in the coming weeks.

    Action to take: Interested investors could fare well in the long run, but shares have popped higher and pulled back before. Patience should allow investors to buy at or under $10 per share.

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  • For traders, the June puts could deliver mid-double-digit returns or better in the coming weeks, depending on whether or not shares drop.

     

    Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.