3 Sectors Where Volatility Is Creating Entry Points, Not Exit Signals
Price swings send plenty of investors running for the exits. To a trader who spent years making markets on an options floor, those same swings look like the opportunity.
That tension runs through three corners of the market right now. Cybersecurity stocks keep climbing even on down days. Copper keeps pressing against multiyear highs as AI infrastructure strains supply. Uranium names have pulled back hard enough to look like a sale to anyone still convinced nuclear demand is real.
The connective tissue is conviction. When the reasons for owning a sector have not changed, a lower price may simply be a better entry point, and options can turn that volatility into a capped, defined risk rather than a gut check.
Volatility as an Entry Point, Not an Exit Signal
Jonathan Rose, a trader with InvestorPlace and a former market maker on the floor of the Chicago Board Options Exchange, treats volatility as uncertainty with a price tag. Today, that uncertainty stems from interest rates, the midterm elections and a relentless news cycle.
Volatile stocks carry richer option premiums, which long-term holders can harvest by selling upside calls against their shares in a covered call. Pullbacks also open the door to averaging into favorite names. In a broad 10% sell-off, there is nowhere to hide, so the real question is which holdings deserve more capital.
For traders, Rose favors buying out-of-the-money calls, where the premium paid is the maximum loss. With a stock at $10, a $12 call priced at 50 cents costs $50, since each contract covers 100 shares. Ten contracts cost $500, and that is the ceiling on risk.
Cybersecurity Spending Turns Non-Discretionary as AI Threats Multiply
Picture a corporate board asking about AI security. No executive wants to explain why the company is not spending on defense. That logic underpins Rose's view that cybersecurity has become non-discretionary spending with room to grow for the next 5 to 10 years.
Price action supports it, in his view. Even as the broader market has pulled back, the cybersecurity names on his watchlist have kept climbing, breaking correlation with the market, a bullish tell from a trader's seat.
His favorite is Rubrik (NYSE: RBRK), which he sees as a less speculative pick in a group where many companies are still pure speculation. At roughly $13 billion in market value, it sits far below CrowdStrike (NASDAQ: CRWD) and Palo Alto Networks (NASDAQ: PANW). That size is the point—companies under $20 billion can still rerate, and most investors already hold the giants through exchange-traded funds (ETFs).
Big money appears to agree. Rose flagged unusual activity in Rubrik's January 2028 $145 calls, with about 5,000 contracts trading near $25 each.
Since each contract covers 100 shares, that is exposure to 500,000 shares above $145, a long-dated bet placed with the stock near $115.
AI anxiety has inflated option premiums, so calls cost more than usual. What could shift sentiment is continued proof that security budgets hold up regardless of the economy.
Copper Exposure Comes in 2 Sizes, From Steady Producer to High-Beta Miner
The AI bottleneck still runs through commodities, per Rose, and copper is his favorite as its cash price tests decade highs.
Freeport-McMoRan (NYSE: FCX) is the established route. Shares pulled back after 2025 mudslides at one of its main mines, and with copper still setting 10-year highs, Rose sees the stock with catching up to do.
Ero Copper (NYSE: ERO), about one-tenth the size, tracks copper closely but with thinner liquidity and bigger swings. Smaller miners also risk running short on capital before reaching steady profits, a risk Rose calls ever-present.
Liquidity is the dividing line. Names like Apple (NASDAQ: AAPL) and Alphabet (NASDAQ: GOOGL) are priced so efficiently that Rose's options trades look elsewhere for opportunity.
Both copper stocks express the same view. For a buy-and-hold stake in an individual retirement account (IRA), Rose prefers Freeport-McMoRan. For out-of-the-money calls, he would rather trade Ero Copper's volatility than the "big slow barge" of its larger peer. The cash copper price is the variable to watch for both.
A Uranium Pullback Tests Conviction in Long-Term Nuclear Demand
Uranium and the broader nuclear sector have swung wildly over the past 6 months to a year, and Rose reads the recent pullback as good timing.
His pick is Uranium Royalty Corp. (NASDAQ: UROY), which collects royalties from mining operations rather than running mines itself.
He first highlighted it about a year ago, when shares traded in the high $2 to low $3 range, and still sees it as a long-term way to own a uranium view.
His discipline is easy to state and hard to follow. Write down the reasons for owning a position, then revisit them when the price drops. If nothing has changed, the stock just went on sale.
That pairs with a hybrid approach that holds the stock in sectors worth owning for years and uses options around pullbacks to lock in gains on the next rally.
Conviction in the Sector Matters More Than Daily Price Swings
Rubrik, Freeport-McMoRan, Ero Copper and Uranium Royalty span different industries but share a structure. Each rides a long-term demand story, from AI-driven security budgets to copper-hungry infrastructure to nuclear power, and each swings hard enough to rattle holders.
The upside is that volatility rewards defined risk and patience. Out-of-the-money calls cap losses at the premium paid, and pullbacks in favored sectors offer long-term holders better entry points.
The risk is that conviction hardens into stubbornness. Options can expire worthless, junior miners can burn through cash, and sentiment around AI and nuclear can turn faster than fundamentals.
None of this depends on timing a market bottom. It depends on cybersecurity demand, copper prices and uranium growth staying intact. Stay focused on those drivers, because that's what moves these four stocks once the noise fades.
Traders who want a structured path into calls, puts and defined-risk strategies can try out Jonathan Rose's Masters in Trading Challenge options education program.
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