Palantir Options Traders See More Downside Ahead

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Palantir Technologies Inc (NYSE: PLTR) hit heavy resistance on June 28 and 29 at $27.47 and subsequently fell into a steep daily downtrend.

On Thursday, the big-data analytics company tumbled further but bears failed to drop it through a key support level at $21.04.

Palantir has recently attracted more interest in the WallStreetBets community although it doesn’t fit the typical characteristics of a Reddit favorite because the group usually targets stocks with a small float that have high ownership levels and a large number of shares held short. Palantir has fairly average underlying statistics:

  • Total Float: Palantir has a massive 1.46 billion shares available for trading.
  • Ownership Levels: 30.45% of Palantir’s shares are held by insiders and institutions with insiders owning 13.21% and institutions holding 17.24%.
  • Shares Held Short: 68.13 million of Palantir’s float is held short. The number is down from a slightly higher 68.64 million that were held short in May.

Options traders aren’t a fan of the stock and on Thursday purchased over $609,881 worth of bearish put contracts. A few options traders chose a strike price of $16 and an expiry of Feb. 18 which implies they believe Palantir will fall about another 25% over the coming months.

See Also: How to Buy Palantir Technologies Stock Right Now

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays the market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

Thursday’s Palantir Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

  • At 9:30 a.m., a trader executed a put sweep near the ask of 225 Palantir options with a strike price of $23 expiring on Sept. 17. The trade represented a $62,100 bearish bet for which the trader paid $2.76 per option contract.
  • At 9:30 a.m., a trader executed a put sweep at the ask of 453 Palantir options with a strike price of $23 expiring on Sept. 17. The trade represented a $126,840 bearish bet for which the trader paid $2.80 per option contract.
  • At 10:12 a.m., a trader executed a put sweep near the ask of 1,500 Palantir options with a strike price of $21.50 expiring on July 23. The trade represented a $69,000 bearish bet for which the trader paid 46 cents per option contract.
  • At 10:26 a.m., a trader executed a put sweep near the midpoint of 359 Palantir options with a strike price of $19 expiring on Feb. 18. The trade represented a $73,595 bearish bet for which the trader paid $2.05 per option contract.
  • At 10:53 a.m., a trader executed a put sweep near the midpoint of 442 Palantir options with a strike price of $16 expiring on Feb. 18. The trade represented a $48,178 bearish bet for which the trader paid $1.09 per option contract.
  • At 10:53 a.m., a trader executed a put sweep near the midpoint of 404 Palantir options with a strike price of $16 expiring on Feb. 18. The trade represented a $44,036 bearish bet for which the trader paid $1.09 per option contract.
  • At 10:54 a.m., a trader executed a put sweep near the midpoint of 465 Palantir options with a strike price of $17 expiring on Feb. 18. The trade represented a $65,100 bearish bet for which the trader paid $1.40 per option contract.
  • At 12:01 p.m., a trader executed a put sweep near the midpoint of 242 Palantir options with a strike price of $18 expiring on June 17, 2022. The trade represented a $59,532 bearish bet for which the trader paid $2.46 per option contract.
  • At 12:01 p.m., a trader executed a put sweep near the midpoint of 250 Palantir options with a strike price of $18 expiring on June 17, 2022. The trade represented a $61,500 bearish bet for which the trader paid $2.46 per option contract.

PLTR Price Action: Palantir Technologies shares closed down 0.42% at $21.47.

Photo: Palantir’s Foundry platform.

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