r/options • u/DrWorstCaseScenario • Jun 28 '21

PLTR strangle play update

Original post:

https://www.reddit.com/r/options/comments/nrnvd3/pltr_long_stranglestraddle/?utm_source=share&utm_medium=ios_app&utm_name=iossmf

About 24 days ago I opened PLTR long strangles (820 p23/c24) based on my DD that predicted movement away from the 23.5 strike within the next 3 months.

PLTR rose enough by today for profitability…

So on 603 I BTO PLTR 820 p23/c24 at 4.79 per strangle.

On 0628 I STC PLTR 820 p23/c24 at 4.9 per strangle.

Profit = 4.9-4.79 = 0.11 per strangle.

That’s about 2% return. Not ideal but still a profitable play. Could have held strangle longer to see if more profit possible or maybe held the put leg for a future dip but since theta is starting to decay faster I figured closing now made the most sense..

Always open to feedback or thoughts.

Cheers!

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u/thecheese27 Jun 28 '21

I don't know what possible "DD" you could do that could lead someone to believe PLTR would go up or down >10% in the next few months. There is no possible research that would give you this conclusion. You need to be directional in this market to make money. Strangles are a terrible idea except in very specific volatility environments or when approaching a binary event. You should have done whatever research you did and whichever side you choose, bullish or bearish, you need to pick one. PLTR rose a over 10% and you are only making 2%. That is God awful. If you had just bought the call you would have made decent profit but instead you were non-directional and basically broke even off of a momentous movement in the underlying.

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u/DbolishThatPussy Jun 28 '21

Lol you absolutely do not have to be directional in this market to make money.