Palantir Technologies (PLTR) Is a Big Beneficiary of Call Buying by Retail Participants, Veteran Investor Says

Retail investors and traders “are buying massive amounts” of call options on Palantir Technologies Inc. (NASDAQ:PLTR), driving the shares higher, longtime investor Don Kaufman said during a recent appearance on Schwab Network.

Kaufman is trying to exploit the trend by buying call options on PLTR himself.

Kaufman is the co-founder of TheoTrade.

By buying a huge number of call options on Palantir Technologies Inc. (NASDAQ:PLTR), individuals are forcing “market makers” to buy PLTR stock, Kaufman explained. That dynamic creates a “retail gamma squeeze” which causes the shares to climb, according to the investor.

Kaufman bought calls with a $126 strike price that expire on June 20. He's also selling June 20 calls with a $130 strike price. His net premium on the trade is $1.55 per pair of options.

“I'm trying to hop on board with the retail freight train that has become the primary driver of this market,” he explained.

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Disclosure: None. This article is originally published at Insider Monkey.