Option Bulls Unfazed by Palantir Stock's Recent Struggles

The equity boasts cheap options, too

Deputy Editor
Apr 19, 2021 at 1:25 PM
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The shares of tech name Palantir Technologies Inc (NYSE:PLTR) were last seen down 3.6% to trade at $21.66. The security has tumbled on the charts ever since scoring a Jan. 27 all-time high of $45.00, and is pacing for its fourth-straight loss with three days' worth of pressure form the 20-day moving average. Still, over the last six months, PLTR has managed to tack on 126.7%, and option traders paying close attention to the equity.

PLTR Chart April 19

Despite the recent negative price action, call traders have speculated on a lot of upside for Palantir stock. In fact, PLTR has found itself on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the past two weeks. According to this data, 1,098,950 calls and 223,452 puts were exchanged over this two-week period, which is good enough for third place on White's list. The most popular contract during this time was the April 25 call, followed by the 24 call in the same series.

Most Active Options April 19

Today, the security is seeing right around the average intraday volume from both sides of the aisle. So far, 200,000 calls and 66,000 puts have exchanged hands. The weekly 4/23 22-strike call is the most popular, where new positions are being opened, followed by the 23-strike call from the same series. Again, this shows options traders are speculating on more upside for the stock by the time these options expire at the end of the week. 

Shorts are piling on at the moment, with short interest up 27.2% during the most recent reporting period, and the 57.74 million shares sold short represent 4.3% of the stock's available float. At Palantir stock's average pace of trading, it would take about a day to buy back these bearish bets. 

Now could be a good time to weigh in on PLTR's next move with options. The security is seeing attractively priced premiums at the moment, per the its Schaeffer's Volatility Index (SVI) of 62%, which sits in the extremely low 4th percentile of its annual range.

 

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