Uranium producer
Cameco (CCJ) is up 16% over the past year, and shares have started to rebound strongly after selling off over the summer. One trader sees further gains ahead.
That’s based on the November 15 $60 calls. With 47 days until expiration, 8,083 contracts traded compared to a prior open interest of 137, for a 59-fold increase in volume on the trade. The buyer of the calls paid $0.52 to make the bullish bet.
Cameco shares recently touched $48, so they would need to soar by $12, or another 25%, to hit the option’s strike price of $60. That would also entail share breaking past their old 52-week high of $56.24.
Operationally, business is going strong for Cameco. Earnings are up 163% over the past year, and revenues are up 24%. Uranium prices have been rising on increased demand, as investors are looking to use nuclear power to generate what they need to run AI infrastructure.
Action to take: Cameco likely have more upside from here, even after popping higher. Today’s buyers will get a 0.2% dividend, which may increase as earnings increase down the line.
For traders, the November $60 calls are aggressive, but could see high double-digit gains or even into triple-digits depending on how quickly shares continue higher. Less aggressive traders may want to buy an option with more time on it to play a potential multi-month trend higher through the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.