Investors in Palantir, Inc. are exploring a strategy that could yield a return of approximately 3.5% over a month by shorting out-of-the-money (OTM) put options. This approach follows a previous recommendation to short 10% OTM put options, which successfully yielded 4.24% in the last month. As of the latest market close, Palantir’s stock price was $170.89, remaining above the short strike price and allowing investors to retain their income without assignment.
In a recent analysis published on October 19, 2025, the suggestion was made to short a put option at the $160.00 strike price, which was set to expire on November 14. The midpoint premium for this contract was noted at $6.78. This premium represents a yield of 4.2438%, calculated as $678 earned on an investment of $16,000. With Palantir closing at $174.01 on the last trading day, investors did not face any assignment to purchase shares at the strike price.
Investors now have the opportunity to replicate this strategy for the upcoming month. The December 19, 2025 expiry presents a new chance to short a $155.00 put option, with a midpoint premium of $4.75. By securing $15,500 in cash collateral, a potential return of $548 can be achieved, resulting in a one-month yield of 3.535%. Although this yield is lower than last month’s, it remains attractive. The current delta ratio stands at -0.26, indicating a 26% probability that Palantir’s stock may decline to $155.00 within the next month.
For those who prefer a more conservative approach, shorting the $160.00 put option, which is only 6.9% out-of-the-money, could yield 4.375%. This option offers a premium of $7.00 on the strike price. While there is no certainty that Palantir’s stock will fall below these strike prices, investors should be prepared for the possibility of assignment, which would require buying shares at the agreed price.
Should assignment occur, the breakeven point for the $155.00 strike price falls to $149.52, which is 13.46% below the recent price of $172.77. This margin suggests that significant price movement would be required to incur an unrealized loss. Similarly, the breakeven point for the $160.00 short put is $153.00, or 11.44% lower than the current price.
Investors facing potential assignment could consider selling short OTM covered calls to generate additional income, thus mitigating any unrealized losses. In a previous article, a price target of $219.00 for Palantir was established, a figure that may be revised higher based on recent performance.
In summary, the strategy of selling short put options at lower strike prices appears to be a viable investment approach for Palantir. With recent market dynamics favoring this method, it has proven more effective than purchasing Palantir stock outright in the past month. As the market evolves, investors are encouraged to continuously assess their strategies to maximize returns.
