BY ANDREW GIOVINAZZI
August 15, 2024
Yo Pit Crazies,
Check out our super magness presentation on beating time decay here.
If you were at that presentation you would have seen a graphic that looks like this. That is right I use all of the products Option Pit sells in my actual trading.
There has been some Fintwit traffic on Palantir Technologies Inc (Ticker: PLTR) about PLTR jumping into the S&P 500 some time in September. That might be true but is there an easier way to ride PLTR until then?
My question is there a reason besides pure speculation that PLTR might get kicked up to the S&P 500 that would compel me to buy options?
Let’s see what we have.
PLTR options look relatively cheap with very strong momentum
So let’s add some context to the data:
PLTR earnings are not until Oct 31, 2024.
Strong 10 day uptrend that just hit 11 days Wednesday. The stock is higher than it was 11 days ago.
IV 30 is low post earnings so traders sold the IV down. It is lower but not the lowest it can be for IV30 which is in the 30s.
Realized volatility is still high with the earnings pop in it so I would discount that somewhat.
I would buy some call spreads in PLTR here and hedge with just a junk put. Or even a Diagonal Time spread while the liquidity providers bash out more implied volatility.
If we go back to the S&P 500 add thesis, calls are bid up a bit on the upside.
That makes spreads and call diagonals real price performers!
Look for this and more theta cheating goodies in the Trading Desk.
To Your Trading Success,
AG
Andrew Giovinazzi
30-Year Trading Pro
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