Selling cash-secured puts on PLTR

Selling a put transfers the downside between $114 and zero to you, and you are paid $5.15 per share for taking it. "Cash-secured" simply means you hold the $11,400 required to buy the shares instead of leaning on margin. Same position, honest denominator.

At August 28, 2026: above $114 the put expires worthless and you keep $515 — that is the maximum this trade can make, $515. Below it you're assigned 100 shares at $114, with an effective cost basis of $108.85 once the credit is applied. That is 11.5% below where PLTR trades today.

The engine puts the probability of keeping the full credit at 72% on PLTR at $123.06 with 70% ATM implied vol on the Aug 28 expiry. High win rate, capped payoff, uncapped-to-zero loss — the risk profile of every short-premium trade. It is not free money; it is a rent cheque for underwriting someone else's insurance.

Max loss is $10,885 — the strike, less the credit, times 100, if PLTR goes to zero. That number is not theoretical on single names; it is simply unlikely. Size the position against that figure, not against the premium.

The real-world failure mode is a gap, and PLTR has the catalysts for one: earnings, government contract announcements, and index-inclusion flows. A put sold 7.4% out of the money offers no protection at all against a move twice that size overnight.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

The most-wheeled name in the retail options world, and the numbers explain why: a share price that makes 100 shares affordable, an implied vol in the 50s, and weeklies deep enough to roll. What the yield tables leave out is that the same vol that pays the premium has produced drawdowns that leave wheelers holding an assigned lot far above the market for months. The wheel works here — it just needs a basis you can defend and a plan for the quarter you spend underwater.

PLTR's Aug 28 strikes are $1 apart near the money (0.81% of spot). That is workable, but it means a one-rung move in a strike is a real change in the trade, not a tweak. 30k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 49 strikes on that expiry — 50% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Retail-deep with a fine strike ladder and real weekly open interest; one of the few high-vol names where four legs fill cleanly.

Skew is inverted: the 25-delta CALL implies 2.5% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is backwardated — Aug 28 implies 8.3% MORE vol than the following month. That is the signature of a dated event inside the front month, and it is the strongest argument for picking the expiry that sits behind it.

At 70% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $23.41 over 27 days — roughly −19.0% to +19.0%, or $99.65 to $146.47. A short-premium structure here is a bet that 19.0% over 27 days is more than PLTR will actually use. That is the thesis, stated honestly.

The specific way people lose money on PLTR: Running the wheel on a position size that assumes assignment is unlikely. On this name assignment is the plan, and the drawdown after it is the part people are unprepared for.