Nuclear energy stocks rolled up and down this week. Oklo, NANO Nuclear Energy, and NRG Energy all saw their shares jump around 10% on Wednesday. However, stocks tumbled in previous trading sessions on news that the demand for power from one big tech player may not be as high as expected.

Since these stocks are volatile and speculative, they might be a smart place to park a modest investment to play options related to them.

1. Bullish Outlook

Investors are excited about the nuclear energy outlook. Energy demand is on the rise, partly due to the rapid buildout of AI data centers. These technology campuses can use as much electricity as small cities. Nuclear energy is an appealing option for serving increased power demand because it has low carbon emissions and cost advantages relative to wind and solar power.

Let’s dive into the potential sscenarios and related options strategies, taking Oklo stock as an example.

Nuclear Energy Fueld by AI Revolution

If you expect nuclear energy companies to capitalize on the growing need for cheap, clean energy. Oklo Inc. is an ideal choice. Oklo hasn't generated any revenue yet. But it's gained a lot of attention because Sam Altman, the CEO of OpenAI, served as its CEO for three years before handing the reins to the company's co-founder, Jacob DeWitte, in 2024. Altman remains on the board as Oklo's chairman and is still closely associated with the company.

Oklo on Wednesday said it was taking part in a Department of Energy initiative that will help it accelerate the rollout of its nuclear powerhouses.

The company said it would participate in a voucher program managed by ENERGYWERX, a partnership intermediary created to connect the Department of Energy with small businesses and expand the development of energy technologies.

Oklo is developing so-called fast fission reactors, which make maximum use of uranium fuel. Fast reactors get their name from fast neutrons, or the type of subatomic particles they use to sustain fission chain reactions and generate energy.

The DOE initiative is intended to support Oklo in testing structural materials that are critical for the company's Aurora powerhouse, which is set to be installed at Idaho National Laboratory by the end of 2027. The proposed design can run on recycled nuclear fuel from other power plants and requires refueling as infrequently as once every decade.

Option Strategy: Bull Call Spread

• Setup: Buy a call option at a lower strike (e.g., $35) and sell a call option at a higher strike (e.g., $40) with the same expiration date.

• Objective: This strategy profits if Oklo’s stock rises, but you are limiting both your potential reward and risk. It’s a good strategy if you believe Oklo will go up but not too drastically.

• Example:

  • Buy a $35 call/ Sell a $40 call

    $OKLO Vertical 250321 35.0C/40.0C$

  • Net cost (debit): $179

  • Maximum gain: $321 (if Oklo closes at or above $36.79)

  • Maximum loss: -$179 (the net cost of the spread)

  Source: Tiger Trade App

2. Bearish Outlook

Nuclear power is yet to be taken fully advantage of, and so investments in this industry are effectively all "early" compared to what is projected to be a very deep need for nuclear power in the next few decades.

The Challenges of Nuclear Dream

Nuclear energy stocks' fortunes are closely tied to growth in artificial intelligence. Shares pulled back sharply in previous sessions as Microsoft canceled some data center leases, amounting to a couple of hundred megawatts.

Nuclear and AI have been a great match over the past year. The nuclear stocks have soared on expected demand from new AI data centers owned by large tech firms like Microsoft. The tech companies like nuclear power because the electricity the reactors produce is reliable and the reactors don't emit carbon, allowing the companies to meet carbon emissions pledges.

But the nuclear-AI connection isn't always a great thing for nuclear companies. Upstart nuclear companies like Oklo have to prove over a long time period that they can construct and operate plants at reasonable costs. But their overall value is jumping up and down based on rumors or whims about the intentions of tech companies. The fate of the stocks can fluctuate on an hour-to-hour basis based on news they have no control over.

Option Strategy: Bear Put Spread

• Setup: Sell a put option at a higher strike (e.g., $35) and buy a put option at a lower strike (e.g., $30), both expiring in one month.

• Objective: This strategy profits if Oklo stays above the higher strike price (e.g., $30). The goal is to keep the premium from the options sold.

• Example:

  • Sell a $35 put / Buy a $30 put

    $OKLO Vertical 250321 30.0P/35.0P$

  • Maximum gain: $176 (if Oklo stays above $33.47)

  • Maximum loss: -$324 (the difference between strikes minus the premium received)

  • Estimated margin: $500

Source: Tiger Trade App