Palantir Tech (PLTR) is a new public company. It’s been public about a month. I think the new company can do well but right now the Relative Strength Index (RSI) is very high. I thought it was a good opportunity for a Naked Call. With the stock at $17.10 I sold 10 contracts of the 11/20/20 $18.50 Call for a premium of 35¢ for $350.
Sell to Open 10 PLTR 11/20/20 $18.50 C @ 35¢ (+$350)
This trade is a Naked Call so it gets a Risk Factor 4.
I don’t care how large my account gets I still love Naked Calls on low priced stocks. This did not affect my margin account much and I’m still bringing in $350 with no investment. I will watch it closely to see if I have to cover this Call before Friday.
See my last post Square Covered Call.
Successful trading,
Steve
The Options Coach