Yesterday I posted my thesis for going long vol into $PLTR EA.
https://www.reddit.com/r/options/comments/1t4135r/palantir_pltr_earnings_vol_setup_are_traders/
It was a tough call to put it on due to the large move – combined with a massive Vol Crush – required to make money. However I structured high reward/risk IC so took the leap.
The company beat and had a slight pop after the bell. The price started to fade and of 2-3 points off the close, with my IC not even close to being ITM.
However, in nearly all EA situations, the post-announcement, pre-opening bell trading is not indicative of post-opening trading. My steadfast rule for EA trades is to ALWAYS wait until 9:45 -10 am before closing out. The first 15 min after the open is characterized by wide b/a spreads and lots of zigging and zagging.
BY 9:45/10, price discover has settled in with tighter b/a spreads.
Today was a perfect example. After the opening bell, $PLTR immediately dropped another 2 points vs pre-opening to ~$140. It bounced a bit around 9:45 to ~$1.43 then traded lower 5 points, modestly below my long put strike. Not one to be greedy, at 10 am I exited at $1.11, down $0.22 from my opening price (-16%). It was a loser, but I saved at least $0.10 – $0.20 by biding my time and waiting to 10am rather than trying to trade immediately at the open.
More earnings trades on tap for today $AMD and $MSTR are always fun ones!
Palantir ($PLTR) Earnings Vol Trade Post-mortem – Patience is the Key
byu/GammaReaper_ inoptions
Posted by GammaReaper_