Palantir Report

I’m writing this report for subscribers who are following all my positions. I have a few stock positions where the stocks are below my buy-in price. The worst situation happens to be with one of my favorite stocks. The stock is Palantir (PLTR).

I own 7000 shares of Palantir and all are below where I entered the position. The ironic thing is I’m in a bad situation as a result of using my favorite strategy. The strategy is selling Naked Calls.

Let me explain how I ended up owning 5000 of the 7000 shares at a price of $44.75. The stock closed on Friday at $29 but it’s been down to $24.50 this week. This is not a good situation.

This started with a Naked Call. On Monday, 1/25/21, with the stock at $35, I sold 50 Naked Calls to expire on Friday, 1/29/21. A 5 day option. These Calls had a Strike Price of $45. I did not think a $35 stock could get to $45 in 5 days. For some reason, on Wednesday the stock started running higher, fast! I was protected because I had a “Buy Stop” order set at $44.75. In the case the stock kept moving higher I would be filled at $44.75 to cover my Naked Call.

On Wednesday afternoon, the same day, I had to leave my house to go get PT on my surgically repaired shoulder. I was nervous because the stock was moving up very fast and I didn’t know what was going to happen.

When I got out of PT I got into my car and looked at my phone to see where Palantir was. It was in the $42 area. I was happy I didn’t have to buy the stock. When I got home I put my computer on and noticed that I had the 5000 shares in my account. What happened was, the stock went up to $44.88 and I was filled on my “Buy-Stop” order at $44.75. When I looked at my phone the stock was at $42. It was already up to my buy-in price and backed off. I was not happy! The stock closed at $39. For the next 3 days the stock continued moving down and hit a low of $30.50 on Tuesday, 2/2/21. At this point I’m down $15 on 5000 shares. For a few days it moved up but then the bottom fell out and the stock went down to $24.50 on this past Thursday the 18th.

My weekly results look great but my account does not. These 5000 shares being down to $24.50 after being filled at $44.75 gives me a huge paper loss of $101,250. Yes, I brought in a lot of premiums to help the situation but this position alone was wiping them out. The stock did recover a bit.

The good thing is I really still like the stock. I fully believe the stock will completely recover. It started moving this Friday when it was up $3.83 on the day.

My account does not look like I opened the year with my best 1st month ever, however, I will continue trading as usual, bringing in premiums, and when this stock recovers my account will look fantastic!

To make things a little worse, I also own 2000 shares of Palantir at $40. At the moment, with the stock closing at $29 on Friday, these shares are down $11 for $22,000, and my 5000 shares owned at $44.75 are now down $78,750 for a total of $98,750.

I’m writing this report to let you know, as you get more and more into this game we must develop risk tolerance. We must understand stocks will fluctuate and our accounts will go up and down. The bottom line is we must pick stocks we believe in. And we must not have any position too big that will slow down our progress. Yes, my Palantir is a big position but not compared to my account. My account grew a lot last year and it can handle this 7000 share position. If I don’t trade Palantir for the next few weeks I still have enough in my account to bring in my goal.

In addition to this palantir paper loss I also have a paper loss with 1000 shares of XPEV, NIO and DKNG. Do not only look at my weekly gains and think my account is going through the roof. Follow all my positions to see the whole picture. I believe it will all look great in time, but being an options trader is always a work in progress.

If you have any questions on anything mentioned in this article send me an email.

Successful trading,

Steve

The Options Coach