$PLTR bulls make quick profits

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

On Feb. 5, Market Rebellion’s activity scanners flagged the purchase of 6,000 Weekly $32 calls, expiring this Friday, Feb. 12, for $1.70 to $3.25 above the open interest of 3,932 contracts with shares at $31.75.

Those calls sold for as much as $7.40 today, well over 2 times their purchase prices. The stock rose 23.5% in the same time period, a large move but nowhere near that of its options on a relative basis.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

PLTR closed up by 5.97% at $36.05 after trading as high as $39.22 earlier in the session. The big data analytics company rose sharply today after it and IBM (IBM) announced a new partnership, extending gains from Friday when Palantir and BP (BP) announced an extension of their own partnership.