Trader who successfully shorted Tesla into earnings now sets sights on this high flyer

The bearish Tesla structure, which we marked before Wednesday’s report, did its best. There are two paths forward: Bank the entire proceeds or use the same playbook against another name report priced for perfection in two weeks.

We’re heading inwards Tesla’sIn the second quarter report of , I argued that the risks were to the downside. Meeting the delivery rhythm with sales was a classic narrative of expectations being “priced for perfection.” Revenue easily rose 26% year over year to $28.2 billion, while adjusted earnings of 34 cents per share missed consensus (50 cents) by a wide margin. Operating margin fell to 1.4% and a 142% increase in capital expenditures negatively impacted free cash flow. Disappointing EPS coupled with a call for patience in robotaxi (which is Tesla’s model) saw the stock lose roughly 14.5% on Thursday by our short strike, closing near the move targeted by the trade. It seems investors are more interested in the “show” of Tesla earnings rather than the “telling” of it.

This brings us to the less flashy but more important part of trading: What to do when a position works? Our bearish structure has captured most of its maximum potential value. When you already have most of the possible profit, the math turns against you; what will be gained is small compared to what you will give back if the stock pulls back (I think the probability of this is quite low). This leaves us with a few plausible paths:

First way: Take the money and run. Close the position, record the gain and wait for another big move. There is nothing wrong with that at all. There is an old rule in investing: “You never lose money by making a profit.” It’s admittedly a trite idea, but we’ll save a more nuanced approach for another day.

Second way: Deposit most of it in the bank and press. Make a similar game with “house money”. Somewhat emboldened, he reallocates some of the profits to another high-multiplier bellwether whose valuation and price action leave it vulnerable to disappointment: palantirReporting August 3.

Palantir is a phenomenal company, in fact one of my favorites. But there are a few counterpoints that deserve weight as we go to press. The case for increasing revenues tenfold without scaling the sales force is, to put it charitably, ambitious. Competition between LLM providers is likely to intensify, and corporate clients are increasingly turning to implementing large language models directly rather than through an intermediary platform. The total addressable market, although large, is limited, and international sales will likely be restricted due to the understandable preference of local sellers when national security is at stake.

Although the numbers are good little Good in the last quarter. Business backlog growth slowed to 12% in the first quarter from 21% in the fourth quarter of 2025, according to Bloomberg. And despite recent declines, Palantir trades at a significant premium to its software peer group and well above its historical EV/sales average.

For context, the average move in earnings at Palantir from one week before (about where we are now) to two weeks after (consistent with the August regular method expiration) is about 26%!

The options market is pricing in a 9.5% one-day gain move, which is higher than the last four quarters but significantly below the long-term average of over 14%. This suggests that August options, which are expensive because they appear at 65% implied volatility, can be reasonably priced, especially if you use spreads by selling one expensive option against another to neutralize the volatility premium.

So what to do?

Step 1: Close the TSLA position – you can sell the August 360/330 put spread for ~$23, well over double the price we set.

Step 2 (for those who press): Buy the PLTR Aug 21 $120/$95 put spread for ~$6.50, funded with a portion of TSLA proceeds.

Risk is defined by the debt paid.

Maximum profit: $25 spread width debited if PLTR closes at $95 or below at expiration; This is a decline of approximately 23% from current levels, in line with the historical three-week earnings window.

The $95 short put materially offsets the 65% volume premium on the long strike.

Like Tesla trading, the Palantir put spread offers defined risk and for those using the proceeds from winning on Tesla, it is less than the “house money” (profits) collected on the initial trade.