Insights 
VT 
Cameco shares have reached an all-time high as the US plans to increase its uranium reserves. This development follows an increased interest in uranium and nuclear power post-COVID, driven by the necessity for green energy alternatives and the demands of AI technology.
Shares of Canadian uranium miner Cameco have risen dramatically, now valued at 16 times their COVID low. This surge represents a significant breakout from a classic megaphone pattern, although the shares are nearing their projected target. Spot uranium prices, however, remain below the peaks recorded in January 2024.
Us Boosts Uranium Stockpile
The news about the US boosting its uranium stockpile is a major bullish signal for domestic and allied producers. We saw Cameco shares surge to a new all-time high on this announcement, continuing a powerful trend. For derivative traders, this spike in the stock has probably also caused a sharp increase in implied volatility, making options more expensive.
We are seeing the stock approach a measured technical target after a significant breakout, which suggests some caution is warranted. It’s important to note that spot uranium prices are still trading below their highs from back in January 2024, currently sitting around $88 per pound. This gap between the soaring stock price and the underlying commodity price might present an opportunity.
Considering the high cost of options right now, traders might look at bull call spreads to express a positive view while managing costs. This involves buying a call option at a lower strike price and selling another at a higher strike, which can profit from a continued, steady rise. This strategy limits potential upside but significantly lowers the entry cost and risk if the stock stalls.
Protecting Gains in a Volatile Market
For those holding the stock after its incredible 16x run since the 2020 lows, this could be a moment to protect gains. Buying protective puts or implementing collar strategies could lock in profits while still allowing for some upside. This protects against a potential pullback from these record levels, especially if the broader market shows weakness.
The long-term picture remains strong, fueled by massive electricity demand from AI data centers, which the IEA projected in mid-2025 will nearly double from 2022 levels by next year. This fundamental demand, combined with the U.S. government’s policy to secure a non-Russian uranium supply, provides a solid floor under the sector. We see this as a super-trend that will likely support nuclear energy investments for years to come.
