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CCJ Covered Call

November 16, 2022
Roll CCJ: Against CCJ Stock, Buy Back the Nov. 27 Call, and Sell the Dec. 26 Call (exp. 12/16)

The Cameco (CCJ) November 27 call that we sold for $0.51 is now worth $0.02 and almost surely on its way to expiring worthless on Friday (good situation). Today, ahead of a “big” volatility crush that will wallop December options next week, in anticipation of the Thanksgiving holiday, let’s roll our short call to the December 26 strike.

To execute this trade you need to:
Buy to Close the CCJ November 27 Call
Sell to Open the CCJ December 26 Call

After this adjustment, the position will be:
Long CCJ Stock
Short December 26 Call

For example, you could buy back the November 27 call for $0.02, and sell the December 26 call for $0.70 (approximately).

October 21, 2022
Roll Position: Against CCJ stock, Buy back your October 28 Call, and Sell the November 27 Call (exp. 11/18).

The CCJ October 28 call that we sold for $2.05 will expire worthless this afternoon. And while that is the case, I want to close this option today for $0.01, so that we can then sell the November 27 call ahead of the weekend’s decay.

To execute this trade you need to:
Buy to Close the October 28 call
Sell to Open the November 27 call

After this adjustment, our net position will be:
Long CCJ stock
Short November 27 call

If you would prefer to not pay the $0.01 to close the October 28 call that is a fine choice. However, I am going to do so, so that I can then immediately sell the November 27 call.

September 19, 2022
Covered Call: Buy Cameco (CCJ) Stock and Sell the October 28 Call (exp. 10/21) for a net price of $26.15 or less.

As I’ve noted for weeks, call activity has been red hot in CCJ, yet the market’s weakness has kept me out of a position. Staying on the sidelines has been the right move, as CCJ finally succumbed to the market’s weakness last week, falling 7%.

Today I am going to get involved with CCJ, though via a covered call, as options premiums in the stock are very high, even though earnings aren’t expected until the November expiration cycle.

To execute this trade you need to:
Buy CCJ Stock
Sell the October 28 Call

For example, you could buy CCJ stock at 28.25, and sell the October 28 Call for $2.10, or a net price of 26.15.

The most you can make on this trade is $185 per covered call if CCJ closes above 28 on October expiration, or a yield of 7.07%.

The most you can lose on this trade is $2,615 per covered call if CCJ stock were to go to zero.

The breakeven is at 26.15.

Let’s dip our toe in the market’s murky water with CCJ today, and then see how stocks react to Fed Chair Jerome Powell on Wednesday.

Please note, if you want to get involved with a straight call buy, I might target the March 30 call for approximately $4.20 (I will not be executing that call buy).

Position (Original) CCJ October 28 Covered Call
Position StrategyCovered Call
Opened DateSeptember 19, 2022
ExpirationOctober 21, 2022
Net Price25.98
Strike28
Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.