TeraWulf (WULF) Might Be a UFO!
After conducting research on a lamb last week, another suddenly appeared and seems slightly off… This new lamb keeps trying to get to the other one, but it’s growling and getting angry. I’ll keep them separated for now, but I’m wondering if it could be a UFO! But first…
What's the Word on the Street?
As of me writing this, the Nasdaq is up while the rest of the market is down. A bit of a breather is normal after the rally on Friday caused by the Jackson Hole speech that strongly hinted at an interest rate cut next month.
This week we have Nvidia earnings which will show if AI spending is still holding up and can continue growing, despite possible signs of a slowdown.
The Fed's preferred inflation measure, PCE (Personal Consumption Expenditures), releases on Friday. It should provide more clarity and may influence how aggressive the Federal Reserve will be with future rate cuts.
TeraWulf (WULF)
What Is It?
TeraWulf, Inc. owns and operates fully integrated environmentally clean bitcoin mining facilities in the United States. TeraWulf will generate domestically produced bitcoin powered by nuclear, hydro and solar energy. The company was founded by Paul Prager and Nazar Khan on February 8, 2021 and is headquartered in Easton, MD. The listed name for WULF is TeraWulf Inc. Common Stock.
Why Is It a Possible UFO?
Primarily its current share price relative to its fair value and what other option traders expect are the reasons WULF could be a UFO.
What About Recent News?
TeraWulf recently signed a 10-year high-performance computing colocation agreement with Fluidstack, securing over 200 MW at its Lake Mariner data center and anchoring about $3.7 billion in contracted revenue, with potential to reach $8.7 billion through lease extensions. Google is backing $1.8 billion of Fluidstack's lease obligations and has received an 8% equity stake. On August 18, Fluidstack expanded its lease with a new 160 MW facility, raising TeraWulf's total contracted capacity to over 360 MW and contracted revenue to $6.7 billion, with potential to reach $16 billion if all extensions are exercised. Google increased its backstop to $3.2 billion and its stake to 14%. These deals position TeraWulf as a major U.S. Al data center provider.
What's the Current Price?
WULF has had an impressive YTD performance, but it's below its 3 month rise of ~117% and 1 month rise of ~73%. However, it's down on the week and on the day and could make for a quick trade while cryptocurrency and crypto-adjacent stocks take a breather.
What’s the Fair Value?
I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…
Since WULF's most recent earnings report on 08/08/2025, it has received 6 ratings and taking the average, the fair value might be somewhere around: $12.67.
All ratings are a Buy. The lowest price target is $10.50, while the highest is $14.
What Do Options Traders Expect?
Calls are trading over equidistant Puts, which means traders think there is a chance to the upside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $8 Put it says $0.52, it’s $0.65 for the equidistant Call at $10.
The premium (the credit you receive for executing the trade) is currently less for selling Puts, as opposed to selling Calls. Basically because of that, option traders expect the stock to go up, rather than down.
How About Volatility?
The IV rank (the purple line) for WULF (stock price in blue) is currently hovering around 13.69, which is pretty low (IV rank goes from 0-100). This makes short strategies (which are what I prefer) less attractive.
What's the Trade?
My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value.
Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.
WULF does not offer a dividend, but that’s not a dealbreaker!
It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral.
So if you saw the most recent image above, I already STO (sold to open) 4 contracts of the $8 Put for the October 3rd expiration. I like to have a DTE (Days To Expiration) that is around ~45 days.
When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.
What About Alternative Trade Ideas?
- If the collateral requirement is too high, another idea is a put credit spread. You would sell a put at a strike below the current share price and then buy a put at a lower strike than the put you sold. By doing so, you will avoid the collateral requirement of a cash-secured put, but the credit received will be smaller. Also, if the trade goes sideways, you will not be assigned shares so no collecting dividends and running covered calls afterwards.
- Just invest! 1 share or even fractional shares are a way to get a foothold in a stock that you think might increase in value.
Completed Trades
Dino Silvestro
BTC with 50% profit
Dino Silvestro
BTC with 50% profit
Wait…Where Are the Candlesticks? And All the Other Indicators?
I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing.
As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.
Disclosures
- I currently have an open trade with WULF (as mentioned in this post).
- No trade is a sure thing. There is always risk involved.
- This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.