The Short Answer for This Week's PLTR Covered Call

If you own at least 100 shares of Palantir (PLTR) and want to sell a covered call this week, the most common approach is to sell an out-of-the-money (OTM) call with a delta between 0.20 and 0.35, expiring in the nearest weekly cycle. At a recent PLTR price near $24, that typically means targeting the $26 or $27 strike expiring in 5–7 days. This setup collects meaningful premium while leaving room for the stock to run before you risk having shares called away.

This article walks you through exactly how to evaluate PLTR's options chain, pick a strike, size the trade, and understand what can go wrong — so you can make a confident, informed decision rather than guessing.

Why PLTR Is Both Attractive and Tricky for Covered Calls

Palantir is a high-implied-volatility (IV) stock. That is good news for covered-call sellers because higher IV inflates option premiums. More premium means more income per contract. But high IV also signals that the market expects big price swings — and PLTR delivers them regularly. Earnings announcements, government contract news, and macro sentiment shifts can move PLTR 10–20% in a single session.

Because of this, the same volatility that fattens your premium can also work against you. If PLTR jumps sharply above your strike, your shares get called away and you miss the upside. If PLTR drops hard, the premium you collected cushions the loss only partially. Neither outcome is catastrophic if you plan for it — but you need to go in with eyes open.

The Options Industry Council (OIC) defines covered calls as a 'neutral to slightly bullish' strategy. PLTR is not a neutral stock. Treat it accordingly.

How to Read PLTR's Options Chain Before You Sell

Before you place any trade, pull up the options chain for the nearest weekly expiry. Here are the four numbers that matter most:

1. Implied Volatility (IV): PLTR's IV regularly runs between 60% and 100% annualized. When IV is elevated — say, above 80% — premiums are richer. When IV is compressed, you collect less. Check the IV rank or IV percentile on your broker platform. An IV rank above 50 means premiums are above average relative to the past year.

2. Delta: Delta tells you the rough probability that the option expires in the money. A delta of 0.25 means roughly a 25% chance of assignment. Most covered-call traders target a delta between 0.20 and 0.35 for weekly trades — enough premium to be worth it, low enough assignment risk to sleep at night.

3. Bid-Ask Spread: PLTR options are liquid, but always sell at the bid or use a limit order between the bid and mid-price. Selling at the ask almost never fills on equity options.

4. Open Interest and Volume: Stick to strikes with open interest above 500 contracts. Thin strikes have wide spreads and poor fills.

Worked Example: Selling a Weekly Covered Call on PLTR

Let's use concrete numbers. Suppose PLTR is trading at $24.10 on a Monday morning. You own 100 shares. You want to sell one covered call expiring that Friday.

You look at the chain and see: - $25 strike (delta ~0.38): bid $0.52 / ask $0.58 - $26 strike (delta ~0.25): bid $0.28 / ask $0.33 - $27 strike (delta ~0.15): bid $0.14 / ask $0.18

You decide the $26 strike fits your goals. You sell one $26 call at $0.30 (splitting the bid-ask). That puts $30 in your account immediately (1 contract = 100 shares × $0.30).

Scenario A — PLTR closes at $25.50 on Friday: The call expires worthless. You keep the $30 premium and still own your 100 shares. Annualized, this kind of trade done weekly can generate 20–40% income on the position, depending on IV conditions.

Scenario B — PLTR closes at $27.40 on Friday: Your shares are called away at $26. You receive $2,600 for the shares plus the $30 premium, for a total of $2,630. You miss the move from $26 to $27.40 — that's $140 of upside you gave up. This is the core trade-off of covered calls.

Scenario C — PLTR drops to $21.00 by Friday: The call expires worthless and you keep the $30. But your shares are now worth $2,100 instead of $2,410 — a $310 unrealized loss. The $30 premium offsets only about 10% of that drop. This is why covered calls are not a hedge against serious downside.

For comparison, consider how this same framework applies to a more stable stock. On MSFT trading near $415, a weekly $420 call (delta ~0.25) might fetch $1.80–$2.20 in premium. The dollar amount is higher, but the percentage return relative to share price is lower because MSFT's IV is much lower than PLTR's. Higher IV on PLTR is the reason traders are drawn to it for income — but the volatility risk is the price you pay.

Risks You Need to Know Before Selling PLTR Calls

Covered calls are considered a relatively conservative options strategy — FINRA and the SEC both classify them as a Level 1 options strategy, the lowest risk tier. But 'low risk' is relative. Here is what can hurt you specifically with PLTR:

Earnings Risk: PLTR reports quarterly earnings, and the stock regularly moves 15–25% on the announcement. If you sell a covered call the week of earnings, you collect elevated premium — but you are also exposed to a massive gap in either direction. A gap up means your shares get called away far below the new market price. A gap down means your premium barely covers the damage. Many experienced traders skip the earnings week entirely or use a much higher strike to reduce assignment risk.

Gap Risk: Even outside earnings, PLTR can gap on government contract announcements or macro news. Weekly options give you no time to adjust if the stock moves overnight.

Opportunity Cost: If PLTR doubles in a year (it has done this before), and you have been selling calls every week, you will have capped a large portion of that gain. Covered calls are a yield strategy, not a growth strategy. If you are holding PLTR primarily for capital appreciation, selling calls every week may conflict with that goal.

Tax Considerations: In the United States, the IRS treats premiums received from selling covered calls as short-term capital gains in most cases. If your covered call is 'qualified' under IRS rules, it may affect the holding period of your underlying shares and could disqualify long-term capital gains treatment. The IRS Publication 550 covers this in detail. Canadian investors should consult CRA guidance, as option premiums are generally treated as capital gains or business income depending on trading frequency. Neither the IRS nor the CRA makes this simple — talk to a tax professional before you start a systematic covered-call program.

A Simple Decision Framework for Picking This Week's Strike

Use this three-step checklist every Monday morning before you sell:

Step 1 — Check the calendar: Is PLTR reporting earnings this week or next week? If yes, either skip the trade or go at least 15–20% OTM to reduce assignment risk from a gap up.

Step 2 — Check IV rank: If IV rank is above 60, the premium environment is favorable. If IV rank is below 30, the premiums may not be worth the assignment risk. Consider waiting for a better setup.

Step 3 — Pick your delta: If you want to keep your shares (you are bullish on PLTR long-term), sell a 0.15–0.20 delta call. You collect less, but you are much less likely to lose your position. If you are neutral or willing to sell at a profit, a 0.25–0.35 delta call gives you more income with moderate assignment risk.

Once you have filled the order, set a mental stop: if the premium doubles (i.e., the call you sold for $0.30 is now worth $0.60), consider buying it back to avoid a larger loss or forced assignment. This is called a 'stop-loss on the short call' and is a standard risk-management practice recommended by the OIC for covered-call writers.

What to Do If PLTR Runs Through Your Strike

Assignment is not a disaster — it is a planned outcome. If PLTR closes above your strike at expiration, your broker will automatically sell your shares at the strike price. You keep the premium. You no longer own the shares.

If you want to stay in PLTR, you can buy shares again on Monday. Yes, you may be buying back at a higher price than you sold. That is the cost of the strategy when the stock moves strongly against you. Some traders roll the call — buying back the expiring call and selling a new one at a higher strike and later expiry — to avoid assignment and collect additional premium. Rolling works best when you do it before expiration and when the new premium justifies the cost of buying back the old call.

The OIC has free educational resources on rolling covered calls that walk through the mechanics in detail. Understanding rolling before you need it is far better than scrambling on expiration Friday.

What is the best strike price for a PLTR covered call this week?

For most retail traders, a strike 5–10% above the current PLTR price with a delta between 0.20 and 0.30 is a reasonable starting point. At a $24 stock price, that means the $26 or $27 strike. Adjust higher if you are bullish or if earnings are coming up this week.

How much premium can I collect selling a weekly PLTR covered call?

It depends on implied volatility, but PLTR's high IV often produces weekly premiums of $0.20–$0.60 per share for OTM strikes, or $20–$60 per contract. That can translate to 1–3% of the stock's value per week when IV is elevated, though this varies significantly with market conditions.

Should I sell a covered call on PLTR during earnings week?

Most experienced covered-call traders avoid selling calls the week of PLTR earnings or use a much higher strike to reduce assignment risk. Earnings can move PLTR 15–25% in one session, which can either wipe out your premium gain or cause you to miss a large upside move. The elevated premium is tempting, but the risk is real.

What happens if PLTR goes above my covered call strike?

Your 100 shares will be called away at the strike price at expiration, and you keep the premium you collected. You miss any gains above the strike. If you want to stay invested in PLTR, you can buy shares again after assignment or roll the call before expiration to a higher strike.

Are covered call premiums on PLTR taxed as ordinary income?

In the US, premiums from selling covered calls are generally taxed as short-term capital gains, not ordinary income, but the IRS rules in Publication 550 are complex and can affect the holding period of your underlying shares. Canadian investors should check CRA guidance, as treatment depends on trading frequency and intent. Consult a tax professional for your specific situation.

Can I sell a covered call on PLTR if I only own 50 shares?

No. Standard US equity options contracts represent 100 shares, so you need at least 100 shares of PLTR to sell one covered call. Selling a call without owning the underlying shares would make it a naked call, which is a much higher-risk strategy that requires a higher options approval level from your broker, as defined by FINRA rules.