Option Plays in Palantir Stock Are Doing Well as PLTR Rises

A risk-averse investor can short out-of-the-money (OTM) PLTR put options as Palantir Inc. (PLTR) stock rises. For example, one-month OTM puts have a yield at 8% lower strikes. Also, buying in-the-money (ITM) calls using put income is a great play.

PLTR closed up on Monday, March 17, at $152.17. It's up from a recent closing trough price of $128.84 on Feb. 24, but down from a peak of $194.17 on Dec. 24, 2025.

Two weeks ago, I suggested in two Barchart articles that Palantir stock was near a bottom (Feb. 24, “Buying In-the-Money Palantir Calls Looks Attractive Here for Value Buyers” and Feb. 22, “If Palantir is Near a Bottom, What's the Best Play in PLTR Stock?”).

I showed that PLTR stock is worth between $189 and $245 over the next 12 months. The options plays I discussed in these articles have done well.

Short Put Plays

For example, I showed that doing a cash-secured short-put play expiring March 27 was worth the investment. On Feb. 22, the $125.00 strike price put option contract was priced at $4.58, and on Feb. 24, it was at $4.80. 

This short put play provided 3.84% yield (i.e., $4.80/$125 = 0.0384) for an OTM distance of almost 3% below the trading price.

On Monday, the midpoint price was down to 43 cents. It will expire worthless by March 27 if PLTR stays at today's price. So, this has been a successful short-sell play. It makes sense to do this again.

For example, the April 17 expiry period shows that the $145.00 strike price put option has a midpoint premium of $5.55. That works out to a 3.83% yield at a 5% lower strike price put contract.

For more risk-averse investors, the $140 put contract has a $4.10 midpoint premium, giving short-sellers a 2.93% yield (i.e., $4.10/$140.00). That strike price is over 8% lower, providing a good downside protection.

Buying ITM Calls

In the Feb. 24 Barchart article, I discussed buying in-the-money (ITM) calls expiring Sept. 18 at the $120 exercise price. The cost would have been partially paid for by income generated from short-selling puts at the same strike for one-month periods.

The premium has risen from $27.95 on Feb. 24 to $44.83 as of March 16. That represents a +60.4% gain (i.e., $44.83/$27.95 = 1.604)in the last 3 weeks, vs. a 17.8% rise ($152.17/$129.18 -1 = 1.178) in PLTR stock in the same period.

The gain would be even higher as part of the cost was paid for by the short-put income. If the investor can keep shorting puts each month for 6 months (i.e., $5.55 x 6 = $33.30), the remaining cost of the call option purchase will be covered.

New investors in PLTR can consider buying new ITM 7-month calls. For example, the Oct. 16, 2026, expiry period shows that the $140 PLTR call option costs $34.25.

So, to gain access to the upside of 100 shares, an investor only has to pay $3,425 with this call, vs. a cost of $15,217 buying 100 PLTR shares at $152.17. 

Moreover, if the investor continues to make $4.10 each month shorting puts at $140, the total accumulated income would be $32.80 ($4.10 x 8), almost equal to the $34.25 cost of the calls.

The bottom line is that shorting PLTR OTM puts and buying longer-dated ITM PLTR calls are two great ways to play Palantir stock.