Adam Mesh, CEO of Adam Mesh Trading Group, joined Benzinga's Premarket Prep team to discuss stocks he's looking at in the nuclear sector and why.
Benzinga's PreMarket Prep is the #1 go-to source for everything you need to know before the market opens! Join our expert hosts as they break down the latest market trends, analyze key indicators, and provide actionable insights to help you navigate the trading day ahead.
Benzinga's PreMarket Prep is the #1 go-to source for everything you need to know before the market opens! Join our expert hosts as they break down the latest market trends, analyze key indicators, and provide actionable insights to help you navigate the trading day ahead.
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00:00Do you have any trading strategies for the end of the quarter, new month or what's on
00:04your radar?
00:05I'm pretty consistent with what I'm going to do, which is collecting premium throughout
00:09the year.
00:11I could talk about where I've been using those strategies and it's nice.
00:15This is my like fourth or fifth time on here.
00:17So it's like hopefully people get to know me a little bit and they see what I'm doing.
00:21So collecting credits has still been working.
00:25Whole new sectors I got interested in, nuclear.
00:29When we saw the Constellation Energy news, the Three Mile Island opening, there were
00:34a lot of stocks that got a pop on that that haven't come back down and the volume is still
00:39coming in.
00:40And for anyone that didn't hear what was going on, I mean, when we think nuclear, we think
00:45bad.
00:47We think natural disasters.
00:49But apparently nuclear is the most efficient and best way for the environment of harnessing
00:57energy and they're going to use it for data centers.
01:00So I've been watching these nuclear stocks to see if we get that follow up move.
01:06And it's the same thing.
01:07The last time I was on, remember we're talking about ASTS in the teens and I was like, I
01:12can't stop watching it.
01:13And the thing went to 35.
01:15It's that same thing.
01:16When you get a swell of volume, the news dies down, but the volume doesn't.
01:21It sets up for a second bigger move.
01:23So I'm watching nuclear stocks for that right now.
01:26What was the symbol and the ASTS, Alpha Sierra, Tango Sierra.
01:30Okay.
01:31Okay.
01:32Give us some of these nuclear stocks that you're looking at.
01:36So CEG, Constellation was the leader, but then we made a list of other ones that could
01:41follow up and the one that I've been watching the most, and I'm not saying to trade it
01:45right now, it's crazy, is SMR, New Scale Power.
01:49It's an $11 stock that's moving two points a day.
01:54It gets my attention, but it's the same strategy with everything, buying calls.
02:00This one you can't sell premium and this one's a little bit harder to trade.
02:03I might trade it as a stock.
02:04I've been trading it as a stock because the options are kind of gapped out.
02:08But my typical approach is to come in around selling options, going out 30 to 40 days,
02:16targeting the 30 Delta.
02:17So if you were selling a naked put, and that naked put doesn't mean getting short naked.
02:22Naked put means willing to own the stock.
02:23If you're selling a naked put, you would target probably the 25 Delta.
02:27But when we're doing credit spreads, because people don't want to own the stocks, we get
02:31a little bit more aggressive to offset the lack of premium collection from doing credit
02:36spreads versus naked.
02:37Does that make sense?
02:38Sometimes I talk fast.
02:39Yeah, it does.
02:40I want to make sure, yeah, for your audience, I just want to make sure I'm not...
02:43Yeah, they love the options talk.
02:45They love the options talk.
02:48What other plays here?
02:49All right.
02:50So my best play, my best play recently, and this is the benefit of why I build a community.
02:56It's literally mutually beneficial.
02:59It's just like being on here.
03:00We're talking, sharing ideas.
03:02So it was someone in my community was like, keep an eye on NEO.
03:06This was pre-China going ballistic and everything, NEO was at five and change.
03:10So I was like, all right, volume looks good.
03:12And we bought a $5 November 15 strike for like a buck.
03:19And literally in less than two weeks, the thing was those options were trading at 240.
03:23So is that like 140% return in two weeks?
03:28So that's like when you could get in and literally only risk a dollar per contract, knowing that's
03:35the most you could lose.
03:38And then you have upside where you can make 140% in a couple of weeks.
03:40That's why I love about options.
03:41You know, it's kind of mindless.
03:43Your risk is defined and the upside is good.
03:46Now I will say I messed up a little bit in NEO.
03:49We have some calls that we own with nothing against them, but when it stalled for the
03:53first couple of days, I said, if it stalls for a couple of days, we're going to sell
03:56premium against it.
03:58So we sold above it.
03:59So we're a little bit capped on the upside for part of the position, but it still worked
04:02out well.