Trade Alert: Top Names + Nuclear
A bullish bet on a new nuclear name in our top ten last night.
When Theme Fit…
Today’s trade is a bullish bet on the nuclear build-out, which is part of the reindustrialization and energy themes we wrote about here last month.
Reindustrialization, Embodied AI, Energy, and Crypto
Positioning For The Next Phase: Reindustrialization, Embodied AI, Energy, and Crypto—And How We’re Trading It
…Meets Trading Strategy Fit
Options are expensive on this one—so we turn that into a feature.
Why we like this setup:
Harvest elevated IV: We’re selling rich premium around our directional view. Net result at entry is a credit (we’re paid to put it on).
Low break-even: Structure pushes our break-even below current spot, giving us cushion if the name chops or drifts.
Defined risk for smaller accounts: Max risk < ~$500 per 1-lot, fully set on day one.
Maximum potential upside ~150%: We’ll probably settle for a bit less if this works out, to get a quick exit, but this is still a great combination of risk versus reward on a structure where the stock doesn’t need to rise at all for us to break even.
Clear, fast exits around the catalyst: With earnings up a month before expiration, our exit strategy sets us up to cash out quickly if it breaks our way.
Details below.
Today’s Top Names Trade
The stock is Cameco (CCJ 0.00%↑), and our trade is a combo expiring on December 19th (the first options expiration after CCJ’s November earnings), consisting of these four legs:
Buying the $85 strike call,
Selling the $90 strike call,
Selling the $75 strike put, and
Buying the $70 strike put,
For a net credit of $0.95. The max gain on 1 contract is $595, the max loss is $405, and the break even is with CCJ at $74.05. This trade filled at a net credit of $1.05.
Exiting This Trade
My plan:
CCJ Call Spread (legs 1 & 2): Open a limit order to exit at a net credit of $4, and lower that price, if necessary, as we approach expiration.
CCJ Put Spread (legs 2 & 3): Open a limit order to exit at a net debit of $0.20, and raise that price, if necessary, as we approach expiration.
Exited the call spread at a net credit of $4 and the put spread at a net debit of $0.20 today.