The Party's Over for Advanced Micro Devices Inc. (AMD)

It was a good run for Advanced Micro Devices Inc. (AMD), but like all good things, this rally must also end. After gaining 400% between March's lows and December's highs, the market has finally figured out that this is not a profitable company, and isn't expected to be anytime soon.

That's not to say it should never be owned at all. It just shouldn't be owned when it's as overbought as it is... or was. The problem is being corrected now, with Advanced Micro Devices on track to post its third straight weekly loss, yet with a ton of room to go before support is found again near $6.00.

Given the distance between here ($8.75) and there, a near-term put option may offer more bang for the buck. Just make sure there's enough delta, which tends to be the biggest victim when the underlying stock is this cheap.