Palantir: Beware I’m more cautious.. do this.

Summary

The video script discusses Palantir's Q2 revenue growth and suggests that it may be too late to buy the stock at over $30 per share. The speaker advocates for a logical investment approach, highlighting the benefits of selling put options as a consistent income strategy. They provide examples of selling put options on stocks like Apple and Palantir, emphasizing the importance of choosing stocks one is willing to own and those with good support levels. The script also advises on managing put options and finding stocks with tight bid-ask spreads for better trading opportunities.

Takeaways

• 📈 Paler's Q2 revenue was $678 million, a 27% increase from the same period last year, showing an improvement over the 21% growth in Q1.
• 🔑 Paler's expected revenue for the first quarter is around $699 million, which is slightly above the $681 million consensus estimate.
• 📊 The company has raised its full-year revenue guidance by 2% to nearly $2.75 billion, indicating a 23% topline increase for the year.
• 💡 The rapid adoption of Paler's AI platform by commercial customers has already occurred, suggesting that future growth may be different from past trends.
• 💰 Paler anticipates a 47% increase in revenue from US commercial customers to over $672 million this year.
• 🤔 The speaker questions whether over $30 per share is a profitable entry point for Paler stock, hinting at potential overvaluation.
• 📊 The speaker prefers not to chase stocks, including Paler, regardless of the business's quality, advocating for a logical investment approach.
• 👥 Insiders from Paler have shared that some employees prefer using PowerBI and Power Apps over Paler for building apps, suggesting competition in the market.
• 📈 The speaker is bullish on Paler but suggests using put options to enter the stock at a cheaper price than $30.
• 💡 Selling put options is presented as a consistent income strategy, allowing investors to buy stocks at lower prices than current market rates.
• 💼 The speaker emphasizes the importance of selecting stocks for put options that one would want to own, particularly those with good support levels.
• 📉 The strategy involves selling put options with a strike price below the current stock price, collecting income, and potentially owning the stock at a lower price if assigned.

Q & A

What was Palantir's Q2 revenue and how does it compare to the same period last year?

Palantir's Q2 revenue was $678 million, which represents a 27% increase from the same period last year.

How does Palantir's Q2 revenue growth compare to its Q1 growth in the same year?

Palantir's Q2 revenue growth of 27% was an improvement over the 21% growth it reported in Q1 of the same year.

What is Palantir's expected revenue for the first quarter at the midpoint of its guidance range?

Palantir expects its revenue to be about $699 million in the first quarter at the midpoint of its guidance range.

What is the consensus estimate for Palantir's revenue from the same period last year, and how does it compare to the expected improvement?

The consensus estimate for Palantir's revenue is $681 million, which is slightly below the expected improvement of 25% from the same period last year.

What is Palantir's full-year revenue guidance, and how does it reflect the company's growth outlook?

Palantir has raised its full-year revenue guidance by 2% from the prior range to almost $2.75 billion, indicating a projected topline increase of 23% for the year.

What is the expected growth rate for Palantir's revenue from commercial customers in the US for the current year?

Palantir is expecting its revenue from commercial customers in the US to increase by 47% in the current year.

Why might the speaker question whether over $30 per share is a profitable price to enter the stock?

The speaker questions the profitability of entering the stock at over $30 per share due to the rapid adoption of Palantir's AI platform by commercial customers, which may have already occurred, implying that the growth may be priced in.

What alternative strategy does the speaker suggest for entering the stock instead of buying it outright?

The speaker suggests using put options to enter the stock at a cheaper price than $30, as a way to potentially acquire shares at a lower cost.

What is the speaker's view on selling put options as an income strategy?

The speaker considers selling put options to be the most consistent income strategy, as it allows for buying stocks at prices lower than their current trading value.

What is the key consideration when choosing a stock to sell put options on?

The key consideration is to choose a stock that you would want to own, preferably one with good support levels and that has already trended down to a level where it's unlikely to go much lower.

How does the speaker define a 'good support' level for a stock when selling put options?

A 'good support' level is defined as a price point where the stock has bottomed out and is showing signs of stability or a bounce back, making it less likely to fall further.

What is the recommended approach for managing a sold put option?

The recommended approach is to wait until expiration. If the option is out of the money, the seller keeps the premium. If assigned, the seller can either hold the shares for long-term or generate income through other strategies like covered calls.

Why is liquidity important when choosing an option to sell?

Liquidity is important because it affects the bid-ask spread. A tight spread means less loss on the transaction, making it more profitable for the seller.

What is the significance of the Delta value when selling put options?

The Delta value represents the probability of the option being in the money at expiration. A lower Delta means a higher chance the option will expire out of the money, which is favorable for the seller.

How does the speaker view the potential of making 1% per week by selling put options?

The speaker views 1% per week as a realistic and conservative goal for selling put options, acknowledging that in a bull market or with other strategies, higher returns are possible.

Outlines

00:00

📈 Palantir's Q2 Revenue Growth and Stock Considerations

The script discusses Palantir's Q2 revenue, which stood at $678 million, marking a 27% increase from the same period last year. This growth rate is higher than the 21% growth reported in Q1, suggesting a robust performance. The company's revenue for the first quarter was expected to be around $699 million, slightly above the consensus estimate of $681 million. Palantir has also raised its full-year revenue guidance to nearly $2.75 billion, indicating a 23% increase. However, the speaker questions whether the current stock price over $30 per share is a profitable entry point, considering the rapid adoption of Palantir's AI platform by commercial customers, which may already be factored into the stock's performance. The speaker shares insights from insiders and suggests alternative investment strategies, such as selling put options, to enter the stock at a lower price, emphasizing the importance of logical investing and not chasing stocks.

05:00

💡 Selling Put Options as a Consistent Income Strategy

The speaker advocates for selling put options as a consistent and potentially profitable investment strategy, especially for those looking for passive income. They explain that selling put options allows investors to buy stocks at a price lower than the current market value, providing a potential discount if the option is exercised. The speaker shares personal examples of selling put options on stocks like American Airlines, Palantir, and Snapchat, highlighting the strategy's effectiveness for generating income. They emphasize the importance of selecting stocks that one would want to own and that have good support levels, as well as managing the risk associated with the strategy. The speaker also discusses the process of selling put options, including choosing the right expiration date and strike price, and managing the position until expiration, either by selling another put option or holding the stock if assigned.

10:01

🚀 Maximizing Returns with Weekly Put Option Sales

The script concludes with the speaker's strategy for maximizing returns by selling put options on a weekly basis. They provide a detailed example of how to sell a put option on Apple, explaining the process of selecting an expiration date, strike price, and managing the trade. The speaker emphasizes the importance of liquidity in options trading and warns against trading options with a wide bid-ask spread. They also discuss the potential returns from this strategy, suggesting that while the income from weekly put sales may seem small, it can add up to a significant amount over time, making it an attractive strategy for consistent income and potentially a good retirement income strategy.

Keywords

💡Revenue

Revenue refers to the total income generated from the sale of goods or services by a company. In the video's context, it discusses Palantir's Q2 revenue of $678 million, which is a 27% increase from the same period last year, indicating the company's financial growth and performance.

💡Growth

Growth in this video refers to the increase in Palantir's revenue over time, highlighting the company's expansion and financial success. It is mentioned that the growth rate improved from 21% in the first quarter to 27% in the second quarter.

💡Guidance Range

Guidance range is a term used in finance to describe the estimated range of future earnings or revenues that a company provides to investors. The script mentions Palantir's guidance range for its first quarter revenue, which is an important indicator for investors to gauge the company's future performance.

💡Consensus Estimate

Consensus estimate is the average of the various earnings or revenue predictions made by financial analysts for a particular company. The video script states that Palantir's expected revenue is ahead of the $681 million consensus estimate, suggesting that the company is expected to outperform market expectations.

💡Artificial Intelligence (AI)

Artificial Intelligence refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the video, it is mentioned that commercial customers have rapidly adopted Palantir's AI platform, indicating the growing integration of AI in business operations.

💡Put Options

Put options are a type of financial contract that gives the owner the right, but not the obligation, to sell a stock at a predetermined price within a specific time period. The video discusses selling put options as an investment strategy, where the speaker explains how it can be a consistent income strategy by potentially buying stocks at a lower price than the current market value.

💡Liquidity

Liquidity in the context of the financial markets refers to the ease with which an asset can be bought or sold without affecting its price. The script warns against using the put options strategy on stocks that do not have much liquidity, as this can lead to a wider bid-ask spread and less favorable trading conditions.

💡Expiration

Expiration in options trading refers to the date on which an option contract becomes invalid if it has not been exercised. The video script discusses the importance of choosing the right expiration date for put options, with the speaker preferring monthly expirations for a more passive and consistent income strategy.

💡Strike Price

Strike price, also known as the exercise price, is the price at which the holder of an option can buy or sell the underlying asset. The video explains that when selling put options, one should choose a strike price that is well below the current stock price to collect more income, while also considering the risk of assignment.

💡Assignment

Assignment in options trading occurs when an option holder exercises their right to buy or sell the underlying asset, forcing the option seller to fulfill the contract. The video script mentions that if a put option is assigned, the seller ends up buying the stock at the strike price, which can be a desirable outcome if the investor wants to own the stock.

💡Delta

Delta in options trading represents the sensitivity of an option's price to a $1 change in the price of the underlying asset. The script uses delta to illustrate the likelihood of an option being in or out of the money, with a higher delta indicating a greater chance of assignment.

Highlights

Paler's Q2 revenue was $678 million, a 27% increase from the same period last year.

Paler's growth improved from 21% in the first quarter of the year.

Paler expects Q1 revenue to be around $699 million, within its guidance range.

The expected Q1 revenue suggests a 25% improvement from the previous year.

Paler has raised its full-year revenue guidance by 2% to nearly $2.75 billion.

The rapid adoption of Paler's AI platform by commercial customers is noted.

Paler's revenue from US commercial customers is expected to increase by 47% this year.

The speaker questions the profitability of buying Paler stock over $30 per share.

The speaker prefers using put options to enter the stock market more cheaply than $30.

Selling put options is presented as a consistent income strategy.

The strategy involves selling put options below the current stock price to potentially buy the stock cheaper.

The speaker shares live examples of selling put options in their portfolio.

Consistency in making 2% per month by selling put options is highlighted as a good return.

The importance of choosing a stock you like for selling put options is emphasized.

The speaker explains how to find support levels in stocks for put option selling.

The strategy's simplicity and effectiveness for generating passive income is discussed.

The speaker provides an example of selling put options on Apple stock.

The importance of a tight bid-ask spread in option trading is highlighted.

The speaker discusses managing a sold put option and the potential outcomes.

The potential for making more than 2% per month by selling put options in a bull market is mentioned.

Transcripts

let's look at the facts paler Q2 revenue

of $678 million an increase of 27% from

the same period last year this was an

improvement over 21% growth paler

reported in the first quarter of the

Year paler expects its Revenue to land

at about 699 million in the first

quarter at the midpoint of its guidance

range this is very important to

understand because I think it may be too

late to buy paler right now and let me

tell you why if you look at the numbers

this would suggest an improvement of 25%

from the same period last year and is

well ahead of the $681 million consensus

estimate paler has also raised its full

year Revenue guidance by 2% from the

prior range to almost $2.75 billion

right now indicating a Topline increase

of 23% this year however investors

should note that the commercial

customers that have rapidly adopted

paler artificial intelligence platform

to quickly integrate AI into their

operations has already occurred and

looking into the future I do think it's

very bright and paler is expecting its

revenue from commercial customers in the

US to increase 47% this year to more

than $672 million however I am

questioning if over $30 per share is

going to be a profitable price to enter

the stock so I have a better idea I was

completely spot on with the stock by the

way I'm going to show you a very good

example of what I'm doing right now with

options however I want to point out that

we need to be logical investors right

here and I am personally not a fan of

chasing a stock in fact I would say

never chase a stock no matter how good

the business is I talk to insiders

working at paler as usual not Insider

information but insiders working there

and some of the workers also told me

that their last job was at synapse and

they prefer to build apps on powerbi and

power apps way faster than they could on

paler other of my students work at

snowflake which is also growing their

business so paler isn't the only

solution and while I'm super bullish I

am not buying Handover fist on the stock

right now I have a better idea on

entering the stock and using put options

to enter the stock cheaper than $30 I'm

going to show you an example from a

month or so ago right before palen your

rent up so this will be the most

important 8 minutes to watch if you want

to scale your portfolio by selling put

options and make $10,000 per month but

before I jump into my portfolio I just

want to say that selling put options is

literally the most consistent strategy

that I've ever come across I've

literally read a book I've been on Wall

Street and every single resource that

I've come across selling puts is the

most consistent income strategy because

you're buying stocks for cheaper than

they're trading at today so Let Me

Explain If a stock is at $100 or $110

you can sell a put option below the

current stock price and then you're

getting to buy the stock potentially for

lower than it's trading at right now so

let's jump into some examples I want to

show you some live examples in my

portfolio so right here as you will see

I am selling quite a lot of put options

you can see here I have American

Airlines you can see I have palen here

you can see I have Snapchat I love

selling put options for income and

specifically I have a student right now

that is making 2% per month selling put

put options now you may be thinking to

yourself that's not a whole lot of money

but when you talk about consistency 2%

per month is actually a really good

return because that's something that you

can retire with okay so for me if I can

make 2% of course you can go higher it

just depends on your level of risk but

consistently hitting 2% per month is

possible by just selling put options so

this is one of the best retirement

income strategies the way I would go

about this is I would just pick a stock

that you like this is the most important

thing that you can possibly do because

if you're going to sell put options on

stocks that don't like if you do get ass

signed on that stock well that's not

really a good thing but if you want to

own the stock anyways so say that you

really like apple and you sell Apple 160

put okay going into apple right now if

you were to get assigned that wouldn't

be a bad thing that means that you would

get apple at a good price since the

stock is currently at $170 per share so

when selling put options the number one

thing that you want to look for is a

stock that you want to own you also want

to find a stock that has a good support

So how do you find support you basically

want to find a stock that has already

been trending down or has already hit a

level where it's unlikely to go below so

you can see here that over the past 3

months Apple has kind of bottomed out

and had a decent bounce even from the

March level of 169 it is um showing some

signs of just going sideways right now

plus not to mention apple is a really

good brand so if I were to sell a put

option right now it would be on Apple so

I would just go to Apple um options okay

then I would go into sell put option now

the best expirations for put options is

it really depends on what you want to

accomplish okay so if you want to go for

weekly income you can sell options that

are expiring every single week if you

want to go for a monthly income you can

go for options expiring every month one

is not necessarily better than the other

so whether you collect $1,000 in a week

or you know $4,000 in a month it's the

same amount but you get more I guess

more permutations in the weekly strategy

you get to see it more often you get to

have more experience but in the long

term as you sell options as you get more

experience as this stuff becomes more

easy consistent and passive for you I do

recommend going for monthly expirations

so I'm going to show you a one-month

option expiration I'm going to make you

know the option expiration right now May

24th if you're watching this in the

future it doesn't really matter just

copy the same logic that I'm showing you

with you know put options right now my

same thought process and just do it for

your favorite stock whether that's Apple

whether that's Google or Amazon or any

stock but I will say that you don't want

to do the strategy on a stock that

doesn't have much liquidity I'll show

you what that looks like in just a

second after I finish that Apple put

example so check it out if I were to go

ahead and sell a put option at 160 and I

um expand this right now you will see

that the bid here is 176 and the ask is

182 what that means is if you were to be

a buyer you would be kind of forced to

buy closer to 182 and if you were to be

a seller you'd have to kind of sell it

closer to 176 the thing is that's not

necessarily a good thing well it's

actually not a good thing at all that's

why you want to find a option that has a

tight bit ask spread now this is is

actually considered tight this is a $6

Gap here so that means that you're

losing about $3 cuz you're probably

going to get filled by about the

midpoint okay so if you were to execute

this trade you wouldn't get 176 you also

wouldn't get 182 you're going to be

executing somewhere in between so about

$179 okay so if you were to sell this

option you would get paid

$179 okay by opening up one contractor

the Delta here is 21 so there's a 21%

chance of this happening which means

that there's about a 79 % chance of this

not happening so if you were to sell put

option on Apple right now this is why I

love the strategy so much is you would

only get a sign about one out of five

times that means four out of five times

you win and the one out of five times

that you lose you don't actually lose

you just get ass signed on Apple stock

this is exactly how I would open up a

trade I would look for an expiration day

of 28 days I would also pick a strike

price that is well below the current

stock price now keep in mind if you go

lower then you're not going to collect

as much income because the lower that I

go the lower the income becomes but the

closer I am to the stock price obviously

it's going to be more expensive because

your risk of getting assigned is also a

lot more so if I go to an at the money

option at the money option is basically

something that's right at the same price

of the stock you can see here how the

Delta is 046 so that is pretty expensive

now what we're going to talk about right

now is how to manage a sellp put okay

this is really important because a lot

of people open up a position they don't

know how to close it but the good news

is is by selling put options is actually

one of the most simplest strategies ever

because when I sell a put option the

only thing that I do is I wait until

expiration so at expiration what happens

is either it's out of the money which is

cool and then I just wait over the

weekend and on Monday I will sell

another put option or on Monday what

I'll do is if I got assigned the shares

that's totally fine I wanted to get

assign the shares anyways so either I

can hold those you know shares of stock

can wait for it to recover I can just

hold for the long term or I can turn

around and start generating income with

those shares I'll drop you a video about

covered calls that's the covered call

strategy but I want to show you another

example of selling puts and what I would

not do as well as best tricks of how to

make more money consistently by selling

put options so I have a watch list right

here and I would basically look at you

know different stocks that I like so

right now these are the stocks that I

hold Apple Amazon American Airlines

paler so let's just go into paler right

now cuz paler is a favorite of many

investors just because you know for many

reasons paler has a lot of innovation

they are growing a lot as well as the

stock share price is also just very good

because selling a put option is only

$2,200 because essentially when you sell

a put option you need to have the

capital there to potentially buy that

put option all right so potentially buy

those shares 100 shares so 100 shares

would be

$2,200 okay so essentially it would be

$2,200 if you were to get a signed so

what you would do in this example is you

just again go to trade Palance your

options now what I would look at is I

would look at selling put option I would

go for a lower Delta just like I was

mentioning in the previous example now

you can go for really short expiration

days like there's nothing wrong with

that you can go for like May 3rd for

example that's a week out and if you

were to go a week out I mean you're

going to collect a lot less premium and

you're also going to be trading more

often so it's it is a bit more work I

don't know if I would recommend that but

it is really exciting to go shorter term

so you can definitely practice by doing

weekly option Trading so for example you

can go for the 21 strike and just sell a

put option so in this example you would

collect $30 and yes you are technically

having a Max loss of

$270 right it says $270 well the truth

is you can't lose $270 you can if the

company goes bankrupt but that's not

going to happen so when it says

$270 that's not really an issue what you

should think about is do I like the

stock am I ready to buy it don't worry

about the max loss whatsoever in this

example okay in this actual trade that

I'm probably going to place once the

Market opens up so here you'll make $30

which is actually a little bit over 1%

it's 1 and a 12% in a week so if you

were to do this you know four times

basically four weeks in a row you would

collect 6% which is you know more than

the 2% that I mention but of course I'm

trying to be conservative here I don't

ever want to like push the dream I

always want to be very like realistic

with the results so 2% with just selling

puts yes obviously other strategies in

option trading can make a lot more I

have some strategies that are on this

Chann channel that can double your money

right that's a bull call spread that's

more of those aggressive strategies but

for just the most safe passive income

selling put options 2% maybe three or

obviously in a bull market you can make

a lot more so back when Tesla was going

up a lot in 2021 I was selling put

options on Tesla I was making way more

like 1% a week easily so 1% a week is

actually one of my biggest goals that's

a goal and usually I am able to hit that

because I'm mixing other strategies in

my portfolio not just selling puts so I

am us usually able to hit 1% per week

but obviously that's a fantastic result

and that is something to strive for