Weekend Trader Series
August 18, 2024
Open Positions Update
- Close the Amazon.com (AMZN) October 18, 2024, 170-strike put on Monday, August 19. Close the position at a limit price within the range of the current market price when you place the order.
The following is this week's recommendation:
Palantir Technologies (PLTR)Place a limit order to buy the Palantir Technologies (PLTR) October 18, 2024 30-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, August 16, this option was offered at $3.85. PLTR closed at $32.08 on Friday, August 16.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, September 16, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Shares of Palantir (PLTR) are enjoying a breakout above the $30 level, which is the site of the stock’s September 2021 and July 2024 high. This level is three times the $10 opening price in 2020, when it became publicly listed in a direct initial public offering (IPO). The equity beat earnings estimates and revised its third-quarter and 2024 revenues to above expectations during its quarterly report earlier this month.
The analyst community is mostly negative, with six “buy” ratings compared to 12 “hold” or worse. This leaves plenty of room for upgrades. Shorts have been in covering mode since October, and at the time of this writing, Friday ushered in 28,000 calls at the 32-strike for August expiration. Implied volatility (IV) is looking reasonable, with a reading of 47% compared to the 63-day historic volatility (HV) reading of 50%. Our recommended October 30 call has a leverage ratio of 5.7, and will double on a 17.8% rise in the underlying security.
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