Energy Fuels, Inc. (UUUU) is trending in social media with mentions of the ticker up 275% in the last 24 hours. Why are investors talking about UUUU? UUUU is a mining company. Their primary product is uranium. The latest news is that Microsoft (MSFT) and Amazon (AMZN) are making big investments in nuclear power to supply their power-hungry AI servers. Those nuclear power plants are going to need fuel, and UUUU is ramping up production to supply new power plants.

The one-month Implied Volatility (the lower green line) is near the 1-year high. The rising implied volatility shows us that demand for options is getting extreme as investors brace for a scheduled earnings announcement that is due on November 1st.  

Get great trades every day--Click here

In this time series chart, the lower green line shows us that call volume has skyrocketed over the past few trading days. The rise in demand combined with the rise in call volume provides clues to the investors’ expectations for UUUU. It’s clear that options investors are positioning for UUUU share prices to increase. The timing of this increase in demand coincides with the news that MSFT and AMZN are investing in nuclear power. Investors are expecting UUUU will profit from increased demand for uranium as new nuclear power plants come online.

This Volatility Term Structure  chart for UUUU  shows a spike in volatility expectations at the November 15th expiration. There are two things that are likely driving the increased demand for November options. UUUU is scheduled to announce earnings before the November 15th expiration, and investors expect increased demand for uranium to feed power demands of AI.

This MDM graph  compares the modeled expected distribution for future stock prices (the orange line) with the actual distribution of UUUU’s share prices over the last year (the blue histogram). You can see that the actual stock movement does not make big moves as frequently as current options prices expect. This graph tells us options for the November 15th expiration are expensive.

This Volatility Cone  chart for UUUU compares implied volatility expectations for each term to the historical volatility for that same term. The blue line shows the average historical volatility;  purple lines show each HV measure’s highest high and lowest low over the past year. You can see that the one-month term (which is the term we are interested in) is at the extreme historical high. This graph tells us that investors have driven prices to extreme levels. It would be difficult to profit if you are an option buyer. That means we will be looking to sell options with our strategy.

UUUU is trending in social media and volatility expectations are high. Growing demand for options is driving options prices through the roof. Buy Low, Sell High is the most basic economic law. High volatility expectations mean options prices are also high, so we are going to use a limited-risk, high-probability strategy to take advantage of extremely high expectations on UUUU.

To get the specific details and prices on today’s trade ideas, be sure to read today’s ODDS Online Daily Option Trade Idea.  

To access Odds Online Daily and be able to see any stock you are tracking in this software, click here.

Thank you,

Don Fishback