Palantir earnings options draw trader after winning Tesla short
CNBC’s Michael Khouw says a Tesla bearish trade has largely paid out and points to a defined-risk Palantir options setup before earnings.
By Theo Nakamura · Staff Writer
· 3 min read
Palantir earnings options are drawing fresh attention after CNBC options trader Michael Khouw said a bearish Tesla trade he highlighted before earnings has captured most of its potential profit. For everyday investors, the point is less about copying a trade and more about understanding how expensive growth stocks can react when expectations are already high.
Khouw wrote that Tesla’s second-quarter results gave the bearish setup much of what it needed. Tesla reported revenue of $28.2 billion, up 26% from a year earlier, but adjusted earnings of 34 cents a share missed the 50-cent consensus cited by Khouw. He also pointed to operating margin shrinking to 1.4%, a 142% jump in capital spending and negative free cash flow.
Tesla shares fell roughly 14.5% on Thursday after the report, according to Khouw, moving through the short put strike in the options spread he had discussed earlier. He said the trade closed near the move it had targeted.
What is the Palantir earnings options trade?
Khouw said traders who want to move on from the Tesla position could close an August 360/330 Tesla put spread at about $23, which he described as more than double its entry price. A put spread is a bearish options structure that buys one put option and sells another at a lower strike price, limiting both the possible loss and the possible gain.
For traders choosing to redeploy some of the Tesla proceeds, Khouw pointed to Palantir, which is scheduled to report on Aug. 3. He described a possible August 21 $120/$95 put spread costing about $6.50. The maximum risk would be the debit paid, while the maximum profit would be the $25 gap between the strikes minus that debit if Palantir closes at or below $95 at expiration, according to Khouw.
Khouw said that would amount to roughly a 23% decline from current levels. CNBC’s quote page showed Palantir at $123.46, up 0.07%, at 1:39 p.m. EDT.
Why Palantir is on the radar
Khouw described Palantir as a strong company but said several issues could matter into earnings. He cited the company’s goal of growing revenue tenfold without expanding its sales force, rising competition among large language model providers and the chance that enterprise customers may use AI models directly instead of through an intermediary platform.
He also said national security concerns may limit some international sales if governments prefer domestic vendors. Bloomberg data cited by Khouw showed Palantir’s commercial backlog growth slowed to 12% in the first quarter from 21% in the fourth quarter of 2025.
Valuation is another part of the setup. Khouw said Palantir trades at a clear premium to software peers and above its own historical enterprise-value-to-sales average. Enterprise value to sales, or EV/sales, compares a company’s total market value including debt and cash adjustments with its revenue.
Options pricing also matters. Khouw said Palantir has historically moved about 26% from one week before earnings through two weeks after, while the options market is pricing a one-day earnings move of 9.5%. He added that August options show 65% implied volatility, a measure of how much movement traders expect, and said spreads can help offset some of that options premium by selling one contract against another.
This story draws on original reporting from CNBC.
