Founded in 2003, Palantir Technologies (NASDAQ: PLTR) is an American publicly traded software company. Palantir Technologies has made a name for itself through data platforms – Gotham, Foundry, and Apollo, that aid decision making for government agencies, defence, and commercial enterprises. Palantir Technologies’ revenue stream comes mainly from government contracts, which is its backbone and also its rapidly growing commercial business.

Trading PLTR effectively is not only about the stock itself and strategy, but it is also about planned execution and having the right tools, and this is where options trading platforms can come into the picture. 

Let’s review all of the above to see if PLTR is a good stock to trade options with right now.

Financial Highlights and Market Capitalization

• Palantir reported a Y-o-Y increase of 48% in its Q2 revenue, which crossed $1 billion, with trailing 12-month revenue up by 38.8%. Annual revenue growth was approximately 29% and net income grew sharply to $327 million in Q2 2025.
• Market capitalization of Palantir Technologies surpasses that of large tech firms like IBM and Cisco, with a valuation standing between $375-$380 million. Moreover, the consistent growth in numbers is showing its effect on the stock price as well, where the stock price has gone up around 400% in the past 12 months.

Palantir is a stock that is frequently in the headlines, all thanks to the kind of business it operates in, having a unique blend of national security exposure and AI-driven innovation. But even if we set aside the fundamentals for now, PLTR remains one of the most actively traded stocks in the options market.

Why is PLTR a favourite among option traders?

• Volatility leads to the creation of opportunities: Palantir is not a low beta stock. Its volatility, powered by earnings announcements, government contract headlines, and AI hype, creates an environment ideal for options trading. IV has been recently hovering around mid-50s for the stock, which is a sweet indicator for options sellers to gain from healthy premiums, while frequent price swings allow buyers to time the move correctly and book profits.
• Frequent market catalysts: Palantir is frequently in the news for one reason or another, ranging from AI-adoption news to government deals, which often spark sharp price movements in its stock. This leads to numerous opportunities for options traders to capitalize on its volatility by either selling it before events when premiums are inflated or buying directional spreads if a significant move is anticipated.
• A retail and institutional favourite: PLTR is closely monitored by institutions, as well as by retail investors. This mix of sentiments creates an environment that favours momentum-driven rallies and sharp pullbacks, both of which are again great grounds for options trading.
• High liquidity in its option chains: PLTR options exhibit consistent liquidity, characterized by heavy open interest and substantial daily trading volume. This implies that traders can enter and exit positions with tighter bid-ask spreads, which is critical for spreads and straddles. Liquidity helps in options trading by allowing traders to scale their positions and manage risks efficiently.

Strategies to implement for PLTR Options trading

• Covered calls: During sideways or moderately bullish trends, covered calls can be implemented as PLTR’s IV makes calls pay attractive premiums. Traders can write slightly out-of-the-money calls against their shares to generate consistent income. It can help in harvesting premiums in ranges and can be combined with cash-secured puts to run the wheel strategy.
• Cash-secured puts: Cash-secured puts can be ideal after a pullback when IV is high. For example, a trader sells a put 10% below the market. This can help in collecting premiums while pre-setting a discounted entry price, given PLTR’s volatility.
• Collars: If somebody holds PLTR shares with significant unrealized profits, they can limit downside without paying much out of the pocket by buying a protective put and selling an out-of-the-money call.
• Calendars and diagonals: Calendars and diagonals are ideal to take advantage of the effect of the catalysts over time. To benefit from time decay and premium differences, ahead of catalysts where IV goes up short-term but the trader expects long-term trends to continue, he can buy a longer-term option while selling near-term options against it.
• Defined-risk spreads: Just before earnings or big contract announcements, credit spreads, i.e., iron condors, can profit if the stock price stays within a range, while debit spreads can benefit from directional moves without unlimited risk exposure.
• Post-earnings trade: Implied volatility usually crushes after earnings. If the stock spikes higher, credit call spreads work well, and if it sells off, credit put spreads can capture premium while keeping risk defined. This is the best way to exploit IV crush, the morning after earnings.

Trade Planning Checklist

• Catalyst: What is the event that drives my trading action? – whether a new contract announcement, earnings release, or AI partnership
• Implied Volatility: High implied volatility is beneficial for sellers, while low implied volatility benefits buyers.
• Defined Risk: Traders mostly prefer spreads rather than naked options for defining their risk and mitigating it.
• Valuation: If valuation looks stretched, traders should be cautious about selling puts.

Palantir Technologies is a story-driven, catalyst-heavy stock that runs on liquidity, volatility, and being in the limelight for one reason or another, making it an ideal choice for options trading, but only if handled with care. Once the trader gets careless, it can become risky. PLTR is option-friendly when one trades it with structure, patience, and defined risk. Pairing strategies such as cash secured puts and covered calls around catalysts, with execution on a good options trading platform, can work in the options trader’s favour. PLTR can be sweet in terms of providing returns, provided its temperament is respected.