Palantir Could Be Gearing Up for a Big Push Higher. Here's How Options Traders Are Playing It

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Palantir is currently about 38% off of its highest levels of the year after a rough Monday that saw the stock fall by about 3%, but options traders are betting that the company may finally be gearing up for a turnaround.

Despite the recent pullback, the tech stock has performed well since going public on Sept. 30, 2020, gaining more than 150% to date. Now, speculation is growing among retail traders that it could be about to make a run back toward its highs.

"Palantir saw above-average call activity [Monday], about 90,000 contracts more than it trades on average, and the most action was seen in the 24-, 25- and 26-strike calls that expire this coming Friday. The 24-strike calls, for example, traded about 45,000 contracts. Those were trading for just under 70 cents," Optimize Advisors CIO Michael Khouw said Monday on CNBC's "Fast Money."

Those 24-strike calls break even at an underlying stock price of $24.70, or about 6% higher from where Palantir closed Monday's session. More bullish traders who took a chance on the 26-strike calls would need to see a jump of more than 12% by Friday's close to break even.

Palantir was more than 2% higher in Tuesday's session.


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