$PLTR bears make quick profits

Option traders found quick profits on downside positions in Palantir (PLTR) today on positions opened early in the session.

Just over half an hour into today’s session, Market Rebellion’s activity scanners flagged the purchase of 12,500 Weekly $25 puts, expiring this Friday, Dec. 11, for $0.16 to $0.35 above the open interest of 9,203 contracts with shares at $28.75.

Those puts sold for as much as $1.02 today, at least 3 times their purchase prices. The stock fell 11.62% in the same time period, a large move but nowhere near that of its options on a relative basis.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

PLTR closed down by 6.73% at $26.63 after trading as low as $25.33 earlier in the session. The big data analytics company’s stock has risen sharply since its recent IPO, delivering wins to the bulls, but today’s trading illustrates how option traders can find opportunity in both an up and down tape.