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« ‘Investment Earthquake in the Energy Sector’ Ahead | Main | Cameco Corporation Bought PUTs Today »
Wednesday
May132009

Cameco Corporation PUTS Gain 45% in One Day

We are pleased to report that our purchase of the June 09 $25.00 PUTs for $1.40 per contract (CCJRE) on Cameco Corporation (NYSE: CCJ) yesterday have started well by gaining 45% to close at $2.05 today.

Cameco Corporations share price dropped $1.62 or 6.21% to close at $24.47, this in turn had the effect of driving up the value of the PUT contract.

We have tracked Cameco closely with the view to making this trade and posted articles outlining our thoughts and possible strategies which we hope were of some use to you. With options trading timing is critical as it is not a buy and hold vehicle. At one time today we considered closing this trade as a 40% gain in one day is not to be sneezed at, however we are still of the opinion that Cameco could retrace its steps back to around the $20.00 mark.

The next question is the tricky one of the exit strategy. Do remember that Cameco could just as easily bounce back and wipe out any gains that have been achieved.

If you bought and sold all in one day then well done, give yourself a pat on the back.

If you have just bought then you could plan to close at a set percentage profit which you think is achievable, in which case calculate what your selling price would be and place the order now. There are aberrations in the market whereby your target could be met briefly during the trading session so you don't need to watch every tick of the action.

We'll stew on it for now and post as and when we decide to make a move.

Options are extremely volatile so please limit the amount of cash that you place into this sort of trade as you could lose it all if it goes wrong.

Cameco Corporation trades as CCO on the Toronto Stock Exchange and as CCJ on the New York Stock Exchange.

Sleep tight.

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