Unusual Options Activity: Palantir Technologies (PLTR)

Data analytics firm Palantir Technologies (PLTR) is up nearly 120 percent over the past year. One trader is betting on a further rally for the stock going into next spring.

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  • That’s based on the May 2024 $23 calls. With 217 days until expiration, 4,027 contracts traded compared to a prior open interest of 110, for a 37-fold rise in volume on the trade. The buyer of the calls paid $2.06 to make the bullish bet.

    Shares recently traded just under $18, so they would need to rally $5, or about 28 percent, for the option to move in-the-money. That would also mark a new 52-week high, surpassing the prior high of $20.24.

    Palantir isn’t yet profitable, but revenues are up nearly 13 percent over the past year, and the company has inked some big contracts in the past few months.

    While Palantir is losing money, they have over $3 billion in cash on the balance sheet, and nearly no debt. So it’s unlikely that company will run into financial trouble anytime soon.

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  • Action to take: Investors may like shares here, as they’re trending higher. Plus, shares are still well off their all-time highs from 2021.

    For traders, the May calls are a leveraged play on a move higher for shares, and could see high double-digit returns given how much time they have until expiration.


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

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