NEW YORK (TheStreet) -- Qualcomm (QCOM) - Get Report began the year around the $75 level. Today it stands (stoops to?) around $62, or about 17% less in value. Since a selloff of such magnitude demands explanation, I will offer that Qualcomm's problem is centered around its dealings with China. However, things do change, and sometimes they do for the better. In Qualcomm's case for potential change, that change being for the better, read about Morgan Stanley's change of heart (to bullish) on Qualcomm's future prospects: Qualcomm Royalty Stream Worries Seen Overwrought.

Qualcomm has an excellent balance sheet that shows the company has a total cash minus total debt position that exceeds $10 billion (over $6 per share). Its annual dividend (paid quarterly) is currently $1.92 a share, an amount almost doubly covered by Qualcomm's $3.66 a share earnings over the past four quarters. Such a strong dividend with a yield exceeding 3% tends to be a parachute if not a floor for any quality stock's decline. And toss into this positive mix the fact that its trailing PE is not excessive by market standards now (17) while the forward PE basis projected earnings over the next four quarters is somewhat low at 13.

I tend to gravitate to stocks that show unusual relative strength during bearish market cycles, primarily because even those sellers who have been reluctant to sell their long positions in a stock that has been in a bear cycle tend to join the last bunch of sellers when the bear is at its most aggressive point in time and price. That inflection point in time and price might be now. And Qualcomm could be such a stock, or, maybe it is not? But that's why I love options trading, as taking such a speculative approach at times such as this one offers the speculator leverage, potential for gain, and 100% controlled risk in the process.

The trade tactic I prefer now for Qualcomm is the bullishly biased, near-the-money, vertical call spread expiring in October. Note this trade is very high in risk due to the fact that the current market conditions favor the bears and Qualcomm must soon reverse the course of its bear cycle.

The trade is as follows: Buy QCOM October 62.50 call for $1.85 and sell QCOM October 67.50 call at $0.45.

The total risk for the spread is 1.40 points. The suggested target to close for a gain is a bid of 1.80 and the suggested target to stop out the trade is a bid of 1.00 point. As always, this is a guideline and you should always stick to your trading plan and what's best for your risk/reward tolerance.