Buying AMD call contracts.

Advanced Micro Devices (AMD) is a very profitable computer chip stock that has been thrown out along with all of the high-growth names over the last few weeks. The company is still in good shape and the stock’s valuation is very reasonable compared to the company’s expected earnings.

Buying call contracts at this level gives us a chance to profit if AMD returns to its recent highs. And buying in-the-money call contracts helps manage risk as these calls will retain some value even if shares pull back.