Palantir Technologies (PLTR) stock has long been a favorite of option traders and is showing positive accumulation despite pulling back in recent weeks.

One bad thing about PLTR stock is that it doesn't pay a dividend.

But what if we could use options to manufacture our own dividend?

Does PLTR Pay a Dividend?

Let's say I have $8,500 to invest into PLTR stock, I could simply buy 100 shares and hope the stock rises.

But, if I want a more conservative play, I could sell a November 21, 2025 put with a strike price of $82.50 and set aside the $8,250 in case I am assigned on the short put.

That $82.50-strike put generates around $1,700 in option premium in six and a half months.

So, my $8,250 investment into PLTR is giving me a 40% annualized "dividend".

Risks of the Trade:

Much like owning PLTR shares, if the stock drops, I'm going to lose money in the short-term.

If PLTR is below $82.50 in November, then I will be forced to buy 100 shares at $82.50.

The breakeven price is equal to the strike price less the premium received, which in this case would be $65.50. 

So if PLTR is below $65.50, at expiration the trade loses money. 

But, if PLTR stays above $82.50 then I achieve a 40.31% per annum return when the put expires worthless.

Cash secured puts are a bullish strategy but are considered slightly less bullish than owning Palantir stock because the potential gains are limited to the premium received.

The second risk with the trade is that if PLTR stock goes on a huge rally, we miss out on any upside. The most we can make is the $1,700 from the option premium.

Greeks and Equivalent Exposure Level

The $82.50-strike put currently has a delta of 36, so selling this put gives an exposure roughly equivalent to owning 36 shares of PLTR stock, although this will change as the stock moves up and down.

It also means the put has a roughly 64% chance of expiring worthless.

One method which can help cut the risk is to turn the trade into a spread and buy an $77.50-strike put. This turns the trade into a bull put spread and cuts the risk from $6,550 to around $275.

There are lots of interesting scenarios you can create with options.

Company Details

Palantir Technologies Inc. builds and deploys software platforms for the intelligence community principally in the United States.

Palantir Technologies Inc. is based in Denver, Colorado.

Implied volatility is currently 71.55% compared to a twelve month low of 37.14% and a twelve month high of 86.17%.

Of the  19analysts covering PLTR, 3 have a Strong Buy rating, 11 have a Hold rating, 1 has a Moderate Sell rating and 4 have a Strong Sell rating.

Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.