Palantir

Ok, lets talk a bit about what has happened here....

That's PLTR from Jan to Apr 2024. As you can see the price jumped up, that was on the 2nd Feb, and as a result, my puts were almost worthless so I bought them back for 2c each. It cost me $100 to close out early, but I thought there was a big possibility that PLTR had rallied too hard and was going to drop back down, so I was able to immediately lock in the $6250 USD gain. That was a 7.57% return on a position that was only open for 12 days, so a very good trade for me. After I closed out my position, I opened a new trade, believing that PLTR was too high (I was wrong). I opened a 4:1 bear put ratio spread 22-26 for 17th March expiry. Basically, I wrote 5 $26 puts, and bought 20 $22 puts, for a net credit of $40. (I received about the same premium to sell 5 x $26 puts, as it cost me to buy 20 x $22 puts). So I was expecting the price to drop back down to $18 - or even a bit below. I also considered that I might be wrong and it may continue to rally.... So if it stayed above $26 - all puts are worthless, I keep the $40 (basically it costs me nothing to run the trade). If it goes below $22 I start making money on the $22 puts - yes I'm losing on the $26 puts, but I have x4 $22 puts. Worst outcome for me would have been PLTR closes at $22 for March expiry... I'd lose $4 per $26 put, and the $22s would be worthless. That translates to a maximum possible loss of $2000. I thought the exposure to the downside was worth it. Anyway, as you can see that didn't happen, and while the trade was in place it looked like it wasn't going to get there, so I closed it out early for a $655 loss. Although I lost out on the trade, I'm not unhappy with how it went. I bought myself a very good amount of exposure for next to nothing. Had the price retreated to earlier levels, (around $16 ish) I could have gained $9000, for a max risk of $2000.