Palantir Sees Tug of War Between Bulls and Bears Boosting Put Options Volume

Luzi Ann Santos joined discussion · Sep 24, 2024 00:54

$Palantir (PLTR.US)$ is seeing increasing volume in put options as bulls and bears spar to gain control of the market.

Shares of the data-analysis software provider opened Monday as much as 1.7% lower on its first day of trading as a constituent of the $S&P 500 Index (.SPX.US)$ after Raymond James analyst Brian Gesuale lowered his rating on the stock. The rating was revised to market perform from outperform, as the analyst cited a five-fold jump in valuation leaving little room for error, according to a Bloomberg.

Source: moomoo mobile app

(To see Palantir's options chain on the moomoo app, click here. For the options market page, click here.)

The bulls soon took over, and Palantir wiped out the declines to swing 1.9% higher at $37.91at 12:51 p.m. in New York Monday. That rebound pushed the put options that give the holder the right to sell the stock at $36.50 out-of-the-money, sending its holders in retreat. Those puts traded 59% lower at 23 cents, after rising to as high as 76 cents earlier.

That volatility pushed the volume to 16,320 so far, more than double its open interest. So far, 338,340 Palantir call and put options changed hands across 19 expiration dates stretching through Jan. 15, 2027. That makes Palantir the fifth most active stock option, behind $NVIDIA (NVDA.US)$, $Tesla (TSLA.US)$, $Apple (AAPL.US)$, and $Intel (INTC.US)$. (To see the options ranking on the app, click here.)

Source: moomoo desktop app

The Palantir bears aren't giving up and after the stock more than doubled since the start of the year, technical indicators aren't looking positive either. Twelve of the 15 technical gauges tracked by moomoo are showing early warning signals that the stock may be overbought, and the trend could be turning bearish. Only the stock's moving average is leaning bullish, with the chart above signaling long alignment.

As of Friday, the daily number of shares sold short on the open market reached 111.18 million, almost 25% of the total volume, the highest percentage in at least over a month, exchange data tracked by moomoo showed.

Source: moomoo mobile app

The stock's foray into artificial intelligence had investors excited over Palantir's prospects, sending the shares higher almost comparable to the meteoric rise of AI darling Nvidia.

But while the AI giant chipmaker trades at just 34.31 times expected earnings over the next 12 months, Palantir is more richly valued at 93.99 times, according to Capital IQ data. Nvidia has been expanding its boosting revenue by more than 100% over the past five quarters, while Palantir has been growing at a slower pace, the biggest of which was a 27% gain in the quarter ended June 30, according to Bloomberg data.

Share your thoughts on Palantir and Nvidia in the comments section. And if you have a price forecast for Palantir, please vote below.

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