Options Traders Target Rallying Software Stock Before Earnings

Palantir Technologies Inc (NASDAQ:PLTR) stock hit a record high of $160.92 today, last seen 3.8% higher to trade at $160.20 and sporting a 111.6% year-to-date gain. The stock has been consolidating around $160 for the past week, though we'll see what happens after the company's second-quarter earnings report -- due out after the close -- as the shares tend to make outsized post-earnings moves. 

The options pits are pricing in a next-day swing of 17.6%, regardless of direction, after this afternoon's report, which is slightly lower than the 18.3% move the stock has averaged over the last two years. The equity finished higher after three of its last four reports, including a 24% pop this past February. 

Options traders have been targeting the equity ahead of the earnings event. PLTR landed on Senior Quantitative Analyst Rocky White's list of equities with the highest options volume over the past two weeks. In the last 10 sessions, the stock has seen 3,435,116 calls and 2,574,202 puts exchanged.

The most popular contract during this time frame was the weekly 8/1 160-strike call, followed by the weekly 7/25 160-strike call. Options traders remain optimistic today, too, with 370,000 calls exchanged so far in comparison to 276,000 puts. 

Despite PLTR's outperformance, the majority of analysts are bearish, leaving plenty of room for bull notes in the event of an earnings beat. Of the 20 analysts in coverage, 16 carry a "hold" or worse rating on the stock, while the 12-month consensus price target of $115.48 is a roughly 28% discount to current levels.