Compared with Palantir’s history, that expected move does not look especially high. In fact, during the past 14 earnings reactions, the stock moved an average of about 15.4% in absolute terms, while the median move was roughly 13.6%. Eight of those reactions were larger than the 11.4% currently priced in.
However, Palantir’s four most recent earnings moves were all below 8%. This suggests that the stock has become less volatile around results lately.
Positioning Leans Toward Upside Speculation
Therefore, the options market expects a larger reaction than investors have recently seen, but a smaller one than Palantir has historically produced. In addition, positioning near the current price appears to lean toward upside speculation. Indeed, the $125 calls saw the heaviest activity, with volume of 7,767 contracts and open interest of 7,515. Call interest is also elevated at the $124 and $127 strikes.
Meanwhile, put open interest is concentrated closer to $120 through $123, which may be investors protecting themselves against a disappointing report.
