However, the recent price increases and today’s price increase of 16% offer traders and speculators a time-limited trading and hedging option

PLTR’s price hike will be discussed in terms of private market prices, third quarter 2020 updates, institutional investors and momentum players

The exact trade and price paid for the hedge are given along with the future execution plan in light of my own long PLTR holdings and LEAPS

As you probably already know, I am optimistic and long on Palantir (PLTR) however I am fully aware that we are in a unique situation where PLTR is likely to be volatile for many different reasons so it is time to Evaluate positions

In this article, I am going to explain exactly what I did to deal with the volatility. At this point, I have made a total of three types of trades, and I am going to disclose my considerations which could be very useful in the coming weeks / p>

Before we proceed, we need to take a step back and marvel at the price movement of PLTR since its direct listing in late September 2020

First off, I think a lot of PLTR investors – and potential investors – assumed the price would stagnate in the $ 9-11 range The first few weeks of the price action provided little inspiration It wasn’t until early November that things really started / p>

To be very clear and avoid a revisionist discussion, the $ 9-11 range was actually quite rational. After all, as CNBC reported:

In his prospectus, Palantir said the average price per share in the private markets was $ 7 as of August31 and as of Sept. 1, was 9 $ 17

And most importantly, you can see for yourself that before PLTR was directly listed, it was quite normal for prices in the private market to drop by $ 5 to $ 6 per share (which most investors cannot easily achieve)

To make up for this, please remember that these are private market prices before they are available to the public.Nevertheless, these price ranges offer some real floor. In other words, I just can’t see PLTR ever again for any reason USD hits except for some kind of accounting scandal or total market collapse. In fact, I see an extremely strong bottom at USD 9, just from the private market alone

When PLTR reported the results for the third quarter of 2020, everything changed in no time at all November reported about it (Palantir Goes Boom) In a nutshell, the financials were absolutely solid:

We expect sales growth of 31% for the fourth quarter of 2020 and sales growth of more than 30% compared to the previous year by 2021

In terms of the bigger picture, the most important thing is that the Q3 2020 report was positive along with expected future growth, PLTR exceeded expectations and laid a foundation for success In simple terms, the company gave investors a fair share Reason to believe

Because of this good news, momentum has been established and the price has risen like a rocket. Also, more good news has been generated:

Here, too, the point is that PLTR has gained momentum with a good quarterly report, but also with additional contracts

In addition, PLTR has gained prominence with PLTR 13-F coverage that many retail investors don’t know much about. Simply put, it means a bunch of institutional funds already on board from Q3 2020 onwards. like George Soros who invested in PLTR (who then said he regretted the investment)

BlackRock, T. Rowe Price, Morgan Stanley, Third Point (Daniel Loeb), Eaton Vance, and many more The point is that this encourages awareness and dynamism behind the scenes (ie, big players talk to big players) and also private investors looking to the Coattails of these big players and the stacks of 13-F reports playing. This doesn’t even include Robinhood dealers and the added fear of missing out, “FOMO”,

PLTR started at around $ 5 to $ 7 in the private market, then started at a little over $ 7, and then quickly hit the $ 9-11 price range, which is rational considering what We know about almost every public debut In fact, PLTR could still drop below $ 10, but that’s not the price that’s now over $ 20 as I write this article

I want to be absolutely clear at this point, just to reiterate, I’m a cop and I’m long on top of that, I believe it could easily be a 5-bagger or 10-bagger stock for me, which converts every dollar invested into $ 5 to $ 10 or more

However, I’ve kept saying that I expect volatility, which means that I expect the price to go down, maybe violently and without warning

For example, the price fell on Friday the 20th November, from a high of $ 20 to around $ 18 that’s 10% and in my book that’s a big drop Then today (Monday, Nov. November), PLTR rose nearly 16% to $ 21

In two days the market will prove me right PLTR is volatile This is the short term view I think in the long run the sky will be blue, the sun will shine and the birds will chirp

All in all, I like what I see. In the short term, however, I think there is a way to take the downside opportunity, hedge and generate more cash to invest in PLTR again

First, I explain the deal I made, Second, I explain why I made it, Third, I explain what I’m going to do next

I bought the PLTR Dec 4 2020 20 put for USD 145 just minutes before the end of today’s trading day (23 So if the price drops below $ 1855 before Nov. December 2020 I’ll do very well with a PLTR of around $ 21, it has to first drop to $ 20 and then drop by $ 145 premium that I paid In short, PLTR has to drop by about $ 245 for this bet aside from that it may pay off any downward movement will make this trade profitable quickly. On the other hand, if PLTR continues to rise in price, I lose

Now you know what I’ve done It may seem very strange on the surface, being a PLTR bull, however I’m expecting a lot of short-term volatility as this is a newly listed stock, fear of expiration the PLTR ban and political changes (i.e. He, election uncertainty, transition) and pandemic aftershocks

In other words, I feel like the price has gone up very quickly, maybe too quickly. In addition, I think we can easily see a $ 3 to $ 5 decline in a very short time that my put is in profit (possibly as a significant gain)

The important thing is that I don’t want my shares to be called, so I have no interest in covert calls. Also, I’m not interested in writing puts to raise more money. I’m interested in common shares Buying and Holding from PLTR So buying PLTR puts is easy here: I’m a little bit covered

I’ve found this to be a cheap hedge in terms of my position size. In other words, if I lose all of my investment in this hedge, it will be a small hit relative to the value of all of my PLTR shares

On the other hand, if PLTR has seriously bad news or a major reversal in momentum – even for a day – I win and I may win big. So either I get “heads” and win a lot on PLTR, or I get ” Tails “and I’ll lose on the common stock but win with the hedge I’ve put in place

Well, what’s next? Quite simply, I’ll wait and see what happens to PLTR’s common stock.If it continues to rise I’ll likely sell my put option for a loss.It can be small or large, depending on PLTR’s price movement, which also means my stocks of common stock win If the price of PLTR goes down, my option will be more valuable and I’ll sell out Then I’ll probably buy more PLTR with the winnings

Remember, I use this hedge because the PLTR has increased nearly 16% in one day Upward volatility I don’t know why That means v-o-l-a-t-i-l-t-y

Today’s price action was a “bat signal” to protect my disadvantages and profit on the way up or down. This trade is risky and not for everyone To make it clear again, I am not touching my core position of the PLTR – Common stocks I’m a bull and I’ve been on PLTR for a long time So this put trade is speculative

Finally, I’ve been PLTR for a long time, I’ve also invested in PLTR LEAPS, which I still hold.And finally, I’ve got some short-term PLTR puts to hedge the massive recent price surge, so I’m keen to keep prices and intrinsic value go up but i think we might see a decline in the short term and i might catch some alpha if that happens you can grab popcorn and watch time reveal my fate

Disclosure: I am / we have been PLTR for a long time I wrote this article myself and it expresses my own opinion. I am not receiving any compensation for this (except from Seeking Alpha) I have no business relationship with any company whose stocks are mentioned in this article will be

Additional Disclosure: I am a Long PLTR Common Share, Long PLTR LEAPS, and I have short term PLTR Put Options. Market conditions and price changes in PLTR may change this allocation and approach at any time

PLTR Share, pltr

World News – CA – Too Hot To Handle: My Palantir Hedge (NYSE: PLTR)

Source: https://seekingalpha.com/article/4391239-too-hot-to-handle-palantir-hedge