Entered a Large Naked Position With PLTR

I love Palantir stock. But I love the premiums more. The stock has been on a run and is up well over $5 in the last couple sessions. I feel it will give a little back so I decided to make a trade using my favorite strategy. I sold 50 PLTR 1/29/21 Naked Calls, but to show I’m not completely nuts I went with a Strike Price of $45. This is $10 Out-of-the-Money on a $35 stock. This gave me a premium of $1.05 for $5250.

Sell to Open 50 PLTR 1/29/21 $45.00 C @ $1.05 (+$5250)

I did place a Buy Stop order at $44.75 but this is still a dangerous move because it’s a hot stock. I give this a Risk Factor 4.

If the stock pulls back and the position expires on Friday this will be a nice premium without making an investment.

Successful trading,

Steve

The Options Coach