A whale is coming in hot, buying up a combined 64,700 call contracts in CCJ, and selling 20,000 ATM puts on top of that. Let’s get into it.
And before you say it, we know — Cameco has already run up. So had NVIDIA when Jon Najarian called it out before the stock reported earnings, with NVDA trading near $300. And so had Netflix, when we alerted Rebel Roundup readers to bullish call buying last week with the stock trading at $364. It’s over 11% higher now. The bullish momentum is here, and we aren’t going to swim against the current. Instead, we’re looking for opportunities to follow big buyers into their trades.
ENTER: CCJ CALL OPTIONS.
This week, we’ve been watching a monster call buyer bet on this name. When we say “monster,” we mean it. Whoever this is, they have a lot of money. Let’s walk through some of the activity we’ve been watching.
May 22nd: With Cameco Corp trading at $28.15, we spotted 2,100 September monthly-expiring $31 strike calls bought in a single print for $1.36 per contract. Keep in mind: These include the earnings, which are expected on August 1st.
May 25th: Cameco Corp is treading water, trading at $27.80, when a very similar trade is made in CCJ call options. By very similar, we mean one big print, far above the open interest, at the same hour of the day. This time, it’s 5,000 July monthly-expiring contracts at the $30 strike, bought in a single print for $0.78 per contract.
May 31st: Cameco falls modestly to $26.84, and someone steps in again — same time of day, same style of buying. 2,600 June 23rd expiring $29 strike calls bought for $0.37 per contract, against an open interest of just 52 contracts.
Here’s where it gets crazy. Those calls all become profitable on June 1st. But he or she isn’t done. Not by a long shot.
June 1st: If May 25th was a double down, this is like going all-in. Cameco Corp shares rocket more than 10%, breaking out of the year-to-date trading range, attempting to break out of the $30 level. The trader picks up 40,000 June 16th $31 strike calls for an average price of $0.40 per contract. Then, as the stock continues to rally higher, they make another trade in 15,000 July monthly-expiring $32 strike calls bought for an average price of $0.41 per contract.
Simultaneously, the buyer sold 20,000 June 16th $30-strike puts for $1.02. Those were at-the-money puts in a rallying stock. That in itself is a $60 million dollar risk on short options. Makes you say, “wow.”
Caveat: Like we said, CCJ is running hot. But with a combined 55,000 call options bought today in the name, plus three other bullish entries over the past ten days, we had to make this our free UOA trade of the week.
As always, two rules to live by:
- Try not to use more than 1% of your portfolio on a single trade.
- If the option doubles in value, consider taking profit, or rolling.
- If the option gets cut in half, consider exiting the trade with the remainder of your option’s value.
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Billed Annually at $995