Generating Income Through Cash-Secured Puts: My PLTR Trade

On April 23, 2025, I sold one cash-secured put option for Palantir Technologies Inc. (PLTR) with a strike price of $80, expiring on May 2, 2025. The premium I collected was $0.30 per share, totaling $30 for the contract. This trade represents a common options strategy known as the cash-secured put, where I commit to potentially buying 100 shares of PLTR at $80 per share if the stock price falls below that level by the expiration date. In return for taking on this obligation, I receive an upfront premium.

The key benefit of selling a cash-secured put is the ability to generate income on stocks I want to own at a discount. In this case, if PLTR drops below $80 and the option is assigned, I would be buying the shares at an effective price of $79.70, factoring in the premium received. This is lower than buying the stock outright at $80. On the other hand, if PLTR stays above $80 by expiration, the put expires worthless and I keep the $30 premium—risk-free income.

This strategy also adds a layer of discipline to investing. Instead of chasing a stock at current market prices, I set my desired entry point and get paid to wait. It’s particularly useful in a volatile market where prices swing frequently. For someone bullish on PLTR’s long-term potential, selling puts allows me to accumulate shares during dips while reducing cost basis.

Lastly, it’s a flexible strategy that fits well with portfolio income goals. Whether the option is assigned or not, I retain control of my capital and can roll or adjust the position if needed. With the right risk management, cash-secured puts are a smart way to earn steady returns.