Trading Desk - November 12th 2026

Okay, Patrick, where's the trade?

Thanks, Eric. Mike's argument is that the uranium supply deficit exists independently of the AI investment cycle. Existing reactors need fuel, utilities need to replenish inventories, and new mine supply continues to face rising costs and delays.

Yet, uranium investments are being sold alongside the broader AI trade, creating an opportunity to acquire physical exposure at a substantial discount to its underlying asset value. This week, I'm looking at the SPAT physical uranium trust, which US investors may know by its OTC symbol SR UF. That quotation doesn't offer US-listed options.

So, this strategy requires access to the Canadian dollar listing U.N. with options trading on the Montreal Exchange. Using the $2660 as a reference price, a return to full net asset value would imply a price around $31.50 based on our our working estimate.

But the trust frequently trades at a discount. So, a full convergence is an ambitious assumption. The more practical question is whether today's deep discount could narrow to something closer to 5 to 10%.

At an unchanged 31.5 net assive value, even a 10% discount would imply a unit price near $28.35. That gives us a recovery objective without requiring uranium itself to appreciate. To express that, I'm looking at the January 15th, 2027 $25 by $28 bull call spread.

Buying the $25 call around $2.5 and selling the $28 call at 90 produces a net debit of $160 per unit. All figures are in Canadian dollars. The long call contains a $160 of intrinsic value and 90 cents of time value.

So selling that upper strike offsets the time value entirely, leaving the expiration break even at $26.60, our reference price. So at $28 or higher at expiration, the spread produces a maximum profit of $1.40 per unit.