Tom and Tony examined how significant stock rallies affect options sellers, focusing on Palantir (PLTR) and Robinhood (HOOD), which gained 109% and 195% respectively in 2025.

Selling naked 20-delta calls in these stocks produced win rates of 56% for PLTR and 45% for HOOD, but with substantial maximum losses (10x and 8x the credit received). When balanced with short puts, maximum losses decreased dramatically to around 2x-3x credit received.

The analysis demonstrated that while three-times expected moves do hurt sellers, adding the opposite side significantly reduces risk exposure. Options markets had already priced in substantial moves for these volatile stocks, keeping losses within reasonable expectations for balanced strategies.