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By Jay Soloff,

Financial markets tend to be cyclical in nature, which means you almost never count out an asset for the long-run. Sure, there may not be a market for lead paint anymore, but lead as a commodity goes through the same trends as most other investment vehicles.

Speaking of commodities, they tend to be even more cyclical than assets like stocks and bonds. One year there may be an abundant wheat crop, and the next year a drought may ruin a huge portion of the yield. For most commodities, whether they are agricultural, metals, or energy, this tends to hold true.

(This even holds true for onions. One of the first tradable commodity futures was in onions, but they were outlawed due to manipulation by major onion suppliers back in the early days of futures trading. That moratorium is still in effect to this day.)

One commodity that hasn’t been in the news for quite some time is uranium. As you know, uranium is the primary fuel source for nuclear reactors, which used to be a very important fuel source. Highly visible accidents have dampened demand for nuclear power, and uranium prices have suffered as a result.

But, as I said just a minute ago, almost everything in the financial markets moves in cycles. Just this week, the U.S. administration is proposing a $150 million uranium reserve as part of its new budget. As you’d expect, this has been very bullish for uranium.

In fact, Cameco (CCJ), the world’s largest uranium producer, was up 5% the day the strategic reserve plan was announced. Now, we don’t know if this line item in the new budget will make it past Congress, but even the possibility of it has been a boon for uranium stocks.

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There has been quite a bit of options activity in CCJ to go along with the reserve news. On the day the news broke, CCJ options traded 10x their normal amount. Moreover, the vast majority of the activity was bullish.

One particular trade that caught my eye was a large number of calls being rolled to a later month. With the stock at around $9.25, a trader closed 20,000 March 8th calls for around $1.22. At the same time, 20,000 calls were purchased in June for $0.45.

The trader collected about $2.4 million from the call sale and spent $900,000 on new calls in June. The breakeven point for the June calls is $10.45. Now, we don’t know what the trader initially paid for those March 8th calls, but we can assume a chunk of the $1.5 million left over is profits.

Meanwhile, the trader still has plenty of skin in the game with the 20,000 June calls. This roll trade was likely a way to take some profits off the table while also buying about three months extra time. Presumably, this person or fund is still bullish on CCJ; otherwise, they would have closed the whole trade instead of rolling it out.

If CCJ still has upside after the big move this week, and this big roll trade suggests that’s the case, there’s still plenty of time to get into CCJ calls for cheap. Those June 10th calls only cost about $0.50, or you could buy March 10th calls for just $0.15 if you think the stock is going a lot higher sooner rather than later.

This instablog post is sponsored by Tim Plaehn, expert on income investing and a friend & colleague of mine at Investors Alley as well as a contributor here on SeekingAlpha. Tim runs the Dividend Hunter newsletter which offers a solid & diverse selection of attractive high yield plays. The service now nearly 10,000 active subscribers and can be had HERE for the rock bottom price of $49 (It usually is $99) for the first year. If one of your New Year's resolutions is to re-balance your portfolio after last year's huge run up in the equity markets, Tim provides a solid selection of lower beta, high yield recommendations.