Investment Reflection on PLTR Put Option Strategies
Initial Put Option Strategy (11 July 2024)
On 11 July 2024, I executed a strategy involving the sale of two put option contracts for Palantir Technologies (PLTR) $Palantir Technologies Inc.(PLTR)$
Rationale:
Strong Stock Performance: Palantir's stock has surged 80% over the past year, indicating robust market confidence and performance.
AI Capabilities: The company's AI-enhanced software has proven valuable to its customers, enhancing its market positioning and business prospects.
Future Outlook: Palantir is well-positioned for continued growth, reflected in its current stock price, making it less likely to drop below the strike price of USD 23 by the option maturity date.
Reflection:
The decision to sell the put options at a strike price of USD 23 was based on the belief in Palantir’s continued strong performance and market support. Collecting a premium of USD 50 per contract provided immediate income, with the expectation that the stock price would remain above USD 23. This strategy capitalized on the bullish sentiment surrounding Palantir, leveraging its solid performance metrics and future potential.
Additional Put Option Strategy (16 July 2024)
On 16 July 2024, I further sold two put option contracts with a strike price of USD 22, maturing on 23 August 2024, collecting an option premium of USD 28 per contract. This decision was made when Palantir's share price dipped to USD 28.
Rationale:
Market Fluctuations: The slight decline in share price to USD 28 presented an opportunity to capitalize on market volatility while maintaining a bullish outlook on Palantir's long-term performance.
Continued Confidence: Despite the minor drop, the company's underlying strengths and future prospects remained intact, suggesting the stock would not fall below the USD 22 strike price by the maturity date.
Premium Collection: Collecting an additional USD 28 per contract added to the income generated from the initial put options, enhancing the overall return from the option strategy.
Reflection:
The decision to sell additional put options at a lower strike price of USD 22, amidst a temporary dip in share price, was driven by sustained confidence in Palantir’s resilience and growth potential. This move further diversified the strategy by adding another layer of income while managing risk through a lower strike price. The cumulative premiums collected (USD 156 in total) provided a buffer against any potential short-term volatility, reinforcing the belief in the company’s upward trajectory.
Conclusion
The option strategies involving the sale of put options on Palantir Technologies were based on a thorough analysis of the company’s strong performance, valuable AI offerings, and optimistic future outlook. The collected premiums provided immediate returns, while the selected strike prices reflected confidence in the stock's resilience above the specified levels. This approach balanced income generation with risk management, leveraging Palantir's market strengths to optimize investment.
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- MyrnaNorth·07-17Nice strategy1Report
- peepzy·07-17Smart move1Report
- Barcode·07-17Nice work 👌👌1Report