BigBear.ai stock has gained nearly 120% this year. This round of rally was not purely driven by speculation as the gain primarily stemmed from the company’s recent contract awards from the Department of Defense (DoD). On the other hand, optimism around Palantir’s strong 2025 outlook also lift the AI stock.

Like Palantir, BigBear.ai is in the field of data analytics and AI. More specifically, the company provides different forms of predictive analytic technology. This can be used for Defense applications, but also within the Enterprise segment to optimize operations.

BBAI is similar to Palantir but lacks profitability and a compelling product portfolio, making it a risky investment.

Since BigBear.ai has had a strong rally this year, it’s reasonable to take advantage of potential price movements while limiting risk. Here are some strategies depending on your market outlook:

Bullish Strategies (Expecting an Uptrend)

1. Bull Call Spread (Limited Risk, Moderate Reward)

• Buy a $9.50 call (at-the-money)

• Sell a $12.00 call (out-of-the-money)

• Max Profit: $177.50

• Max Loss: -$72.50

• Best If: You expect BBAI to rise moderately but not skyrocket.

  $BBAI Vertical 250221 9.5C/12.0C$

  

2. Cash-Secured Put (Own at a Lower Price)

• Sell a $7.50 put (out-of-the-money)

• Premium Received: Lowers your cost basis

• Risk: You may be assigned shares at $7.50 if BBAI drops

• Best If: You want to own BBAI at a lower price while generating income.

  $BBAI 20250221 7.5 PUT$

  

Bearish Strategies (Expecting a Pullback)

3. Bear Put Spread (Limited Risk, Moderate Reward)

• Buy a $10 put (at-the-money)

• Sell a $7.50 put (out-of-the-money)

• Max Profit: $147.5

• Max Loss: -$102.5

• Best If: You expect a moderate drop but not a crash.

  $BBAI Vertical 250221 7.5P/10.0P$