Palantir Technologies is attracting significant market attention as traders anticipate its upcoming earnings report, with hopes that the software provider could stage a comeback similar to Microsoft’s recent post-earnings rally. Microsoft’s stock experienced a three-day, 25% bounce following its earnings, and current options flows around Palantir are showing a similar pattern, with traders heavily favoring call options in anticipation of a larger-than-usual price swing [1].
On Monday, more than twice as many Palantir call options traded compared to puts, with 56,000 calls and fewer than 25,000 puts changing hands, according to ThinkOrSwim data. Of the $160 million in options premium traded, $120 million was tied to calls, and the top five contracts by volume were all calls, as reported by SpotGamma. The most popular bullish contract was the 130-strike call expiring Friday, with 8,500 contracts purchased for a total of $4.4 million. These contracts, priced at $5.30 each, require an 8% rally in the stock before the weekend to be profitable. The 150 and 140-strike calls were also among the most actively traded [1].
Options pricing is currently implying a 10.5% move for Palantir after earnings, which is notably higher than the median 7.4% move observed over the past year, according to Cboe LiveVol data. However, for the past five consecutive quarters, Palantir options have overestimated the actual post-earnings move [1].
Despite the bullish sentiment in call volume, bearish and neutral bets remain present. Seven of the eight largest dollar-amount trades of the day were neutral or bearish, including the largest premium trade: a sale of 800 of the 145-strike calls expiring in mid-December 2028, a bearish position that netted $3.4 million for the seller [1].
CONCLUSION
Palantir’s options market is signaling heightened expectations for a significant post-earnings move, with bullish bets dominating but notable bearish trades also present. The market is closely watching to see if Palantir can replicate Microsoft’s recent rally, though historical data suggests options traders have overestimated Palantir’s earnings moves in the past.