Palantir's 9% Jump Boosts Appeal of Call Options as Bulls Pile In: Options Chatter
$Palantir (PLTR.US)$'s 9% jump is boosting demand for call options that could pay off should the stock rally gains more steam.
Palantir shares climbed above $194 Monday, rebounding from an 11% slump last week, their worst performance since the five days ended April 4. That was the same week when President Donald Trump announced "Liberation Day," unleashing a slew of tariffs on U.S.'s trading partners and fueling a stock market sell-off.
The gains came after hedge fund manager Michael Burry, famous for his "Big Short" during the housing bubble over a decade ago, hinted that he may no longer be short Palantir shares.
Call options that give their holder the right to buy Palantir shares at $200 each by the end of the week attracted the heaviest trading among contracts tied to the software company that provides artificial intelligence (AI) systems. Volume on that contract more than doubled to 54,470 options as of 1:47 p.m., from the previous session.
Trading advanced as the stock price climbed near that strike price, increasing the odds that the call option could be in-the-money by the time it expires Friday. Volume on those $200 call options expiring in four days is already more than double the 24,040 open interest, exchange data tracked by moomoo showed.
Burry's social media post overnight came after Palantir CEO said in a CNBC interview that the two stocks that the hedge fund manager is shorting are the ones "making all the money, which is super weird - like the idea that chips and ontology is what you want to short is batsh** crazy."
While his company, Scion Asset Management, filed a 13F document showing it held put options that give their holder the right to sell 5 million Palantir shares and put options on 1 million $NVIDIA (NVDA.US)$ shares, the document was based on positions as of Sept. 30 and the holdings in the portfolio may have changed since then.
"Doesn't surprise me one bit that Alex Karp and his "ontology" @PalantirTech cannot crack a simple 13F," Burry said in his post. "A fundamental principle of any rigorous ontological/epistemological model- whether philosophical or in data science - is recognizing when your information set is insufficient for valid conclusions."
Share your thoughts on Palantir in the comments section. Do you think the worst is over for Palantir, or could the stock turn lower over the next few days? Let your voice be heard by voting below. And if you want to read more options columns like this one on Cipher Mining, or this like this one on Amazon, Apple and Alphabet, follow me here, where you can also find my earnings stories on some of the biggest stocks.
Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period. Certain complex option strategies carry additional risk, including potential losses that may exceed the original investment amount. If applicable, supporting documentation for any claims will be furnished upon request.
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Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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webguybob : I laugh at the PLTR haters.
ryu1192 : Mr. Luzi, do you perhaps anticipate that after a large amount of selling accumulates and the price decreases to some extent over three or four days, it would be a good time to buy?
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Lately, I have been watching the column and started selling when prices rise, but since they only increase slightly, I end up selling through small gains, and my investment strategy remains unclear.
Occasionally, it works out well, but more often than not, I either lose money or experience only a gradual increase in profits.
Is there an established way to handle highly regarded tickers?
Lavelle Smith : understand completely
FACT
VSM : Palantir, yes, have fear share in market cap big gain last week was in actions