Trading Palantir ($PLTR) with Alan Andrews’ Pitchfork Strategy

And this time, Palantir gave me a new signal to the short side. Since I like to play this with LEAP options, I bought two ITM puts and sold one OTM put to harvest some theta if the market goes sideways. A LEAP Option with a delta above 70 does not really lose much value anyways over time, if the Stock is not moving. The opposite is true for an out of the money Option. Be careful with these guys, their here to rob you!

From a psychological perspective, this trade structure is excellent for me. I know I have time in this trade, I can execute my plan, and my capital is not exposed to unnecessary risk.

A word about the 2:1 ratio:
The benefit of buying two options while selling only one is that it leaves the door open for larger profits. If price moves deep ITM on the sold put, there is still one long put that can continue to print money.

But what if price trades back into the pitchfork?
In that case, the sold put offsets part of the losses. With this mechanism in place, I can withstand a drawdown even longer.

So it is, in a way, the best of everything:

I get exposure to Palantir
I limit and hedge my risk partially
I have plenty of time with the LEAPs
I keep the door open for substantial profits

All in all, a good trade to pick up with a fork.

Here's the Palantir chart analysis, along with Gold, Bitcoin and Crude Oil on YouTube:

https://youtu.be/N1cPMKpExI4?si=pzJfoNQg-3rrdhoi

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