Hey Traders,

The Russian attack on Ukraine has sent markets tail-spinning, fluctuating between massive drops and days of recovery …

But even as markets have been in flux … certain sectors are taking the opportunity to shine …

Including uranium!

The U.S. imports 40% of its uranium from Russia, and Russia is the tenth largest uranium producer worldwide (sitting just behind Ukraine in ninth…). 

Sanctions against Russian uranium could cut supplies, while demand remains steady, or even rises as countries around the world look to alternative energy sources, including nuclear.

Plus, with much of Europe dependent on Russian oil to meet their energy needs, sanctions against Russian black gold could increase demand for alternative energy sources, further boosting the demand for uranium.

So with the Russian conflict escalating, uranium has rallied …

And Canadian-based Cameco Corp. (Ticker: CCJ) is rising in step with the sector. 

The largest publicly-traded uranium company has seen its shares pop from $20.53 to nearly $25 since the start of the conflict …

And the shares closed 2.5% higher on Wednesday at $25.07.

You’ll notice CCJ is still below its “uranium mania” highs from early November … before omicron and ARK Innovation ETF (Ticker: ARKK) helped pressure markets lower.

Could CCJ reclaim these highs … or higher?

One Big Money trader is making their own power play …

And they’re looking for plenty of CCJ upside to come.

This trader opened up a four-by-five call ratio spread in two separate blocks. First, they purchased 8,000 of the June 27-strike calls for $2.78-$2.28, and sold 10,000 contracts of the June 37-strike calls for $0.58.

Then, just a little over two hours later, they opened another ratio spread, buying a total of 8,000 June 27-strike calls for $2.18, and selling the June 36-strike calls for $0.61.

By selling a higher number of calls, this trader is able to cut down on the overall outlay required to make this trade …

But it does open them up to a fair amount of risk, as a sudden hard rally out of CCJ could leave this trader holding a total of 4,000 naked calls between the June 36- and 37-strikes.

Overall, this trade communicates that Smart Money is looking for CCJ to move above the 27-strike … and wind slowly higher without eclipsing the strikes sold.

However, those weren’t the only parts to this trade …

These trades both crossed at the same time as two blocks of CCJ shares … presumably to help this trader cut down on their delta exposure, and make this trade more delta neutral.

This helps them reduce their directional risk, while allowing them to maintain their bullish position.

All in all, it looks like Big Money is making their move on CCJ …

And looking for some explosive gains!

I would be watching uranium, and CCJ in particular, for any interesting price action in the weeks ahead.

Your Only Option,

Mark Sebastian