Palantir (PLTR) shares have cratered 26% in 2026. And they’ve corrected a menacing 39% since November. But don’t fear an end-of-days situation for PLTR stock. Exploit it with a bullish married put spread.
If misery loves company, PLTR stock is far from alone. A risk-off trade in software-as-a-service or “SaaS” stocks has taken Wall Street by storm.
There’s extreme worry that AI agents are displacing traditional layered or “seat-based” software subscriptions and are set to render the SaaS business model extinct.
The fearful price action, which surrendered more than $1 trillion in market value in just one week this month, even has its very own “SaaS apocalypse” or “SaaSpocalypse” nicknames to remind investors why they should be panicking.
Notable victims of the SaaSpocalypse stock rout include top tech giants Salesforce (CRM), Adobe (ADBE), Autodesk (ADSK), and even Microsoft (MSFT).
Not all SaaS stocks are created equal though.
And in the case of PLTR stock, it appears Wall Street’s severe anxiety has resulted in the baby being thrown out with the bathwater.
About Palantir
PLTR stock’s underlying business involves a trio of AI and human powered software platforms for government intelligence and defense, as well as larger commercial enterprises.
Palantir’s AIP platform allows its commercial customers to integrate, analyze, and visualize massive datasets, uncover hidden patterns, and enable data-driven decisions across sectors.
That may sound like a SaaS business that’s at risk of being one-upped by AI. But Palantir is actually well-shielded from the market’s apocalypse trade in software stocks.
Palantir is a hybrid model that’s critical to a company’s AI infrastructure as it drives high-value adoption and long-term, high-margin contracts from those customers.
It’s a distinctly different business than a replaceable, seat-based software subscription and the key concern for the market’s SaaSpocalypse.
Palantir Stock Technical Picture
It was actually just over two weeks ago when Palantir first caught my attention.
The stock forged a 38% Fibonacci retracement of its three-year all-time-low of $5.84 in January 2023 to PLTR’s November’s $207.52 all-time-high.
More enticingly, this well-watched corrective test and a key level for many bear cycle bottoms occurred in tandem with a Bollinger Band reversal signal on the daily timeframe.
Still, some form of technical confirmation from the weekly price chart is viewed as appropriate prior to buying stock.
That occurred this past week in Palantir.
Shares of PLTR generated a Bollinger Band reversal pattern on the weekly perspective as of Friday’s closing bell. The stock signaled by narrowly finishing above the lower band within an inside candlestick pattern.
The favorable price action follows a fearful string of three straight closing periods outside the popular mean-reverting, price volatility indicator.
Lastly, with the weekly RSI at its lowest readings since January 2023 and the indicator a whisker from a bullish crossover signal, the technical evidence for owning PLTR stock is ripe for consideration.
Affordable PLTR Stock Protection
No doubt the price chart in PLTR stock should resonate with technical-oriented traders looking to buy growth at a discount when others are fearful.
Yet it’s Palantir’s current options prices that makes the situation truly compelling. Shares can be purchased alongside reasonably priced, ironclad downside protection with a long put.
Option premiums on PLTR stock are affordable as evidenced by the IV Rank and IV Percentile readings of 18% and 31%, respectively.
The former gauge means PLTR’s options are just 18% above their 52-week low.
At the same time, an IV Percentile of 31% indicates option prices have been more expensive 69% of the trading days over the past year.
Another significant benefit to buying a protective put right now is that implied pricing in PLTR is slightly below the stock’s historical or statistical volatility.
A one-to-one combination of one long put for every 100 shares purchased is known as a married put spread. This hedged position allows stock investors to have unlimited upside, while maintaining guaranteed protection at the owned strike.
For all intents and purposes, after factoring in the cost of carry and dividends, where applicable, the risk-to-reward of the married put spread is identical to the same strike call option.
You can learn more about the married put strategy here.
Shown above is the PLTR May $135 married put. By using the May contract, time decay isn’t an overriding concern for the next few weeks.
This particular at-the-money (ATM) strike also matches the closing price in Palantir shares, which generated the bullish weekly Bollinger Band chart signal. This smartly contains risk to less than 10% in the event the stock hasn’t finished its bearish price cycle.
But PLTR married put investors could actually do better for themselves.
What’s different than simply buying the $135 call option and maybe seeing the contract go out worthless is a bullish married put spread can be rolled, i.e., adjusted to profitably exploit weakness in Palantir share price, and under the right circumstances of course.
The Bottom Line
A married put strategy on PLTR stock has a lot working in its favor right now. And hopefully a meaningful rally makes an appearance, given the spread’s unlimited upside profit potential. Still and given sufficient stock volatility through strikes and consistent options adjustments over time, up or down, protection has rarely looked better.
On the date of publication, Chris Tyler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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