Buying DE call contracts.
Deere & Co. (DE) is a profitable agriculture equipment company.
The war in Ukraine has damaged a material portion of the world’s food supply. And farmers now need to be as efficient as possible to grow crops and meet this rising demand.
This should drive profit growth for DE. Meanwhile, the stock trades for an attractive 12 times expected earnings for next year. And shares are finding support near $3.20
Buying in-the-money call contracts gives us a chance to book big profits if DE rebounds from this level. And if shares trade lower, our call contracts should still retain some value helping to reduce our risk.