WOLF shares more than doubled even after the semiconductor firm filed for Chapter 11 bankruptcy on Tuesday. Here’s how to play Wolfspeed stock following the rally.

The company called the move the "next step to implement its previously announced Restructuring Support Agreement ("RSA") with key lenders." Wolfspeed has said the RSA would slash its overall debt by 70%, or about $4.6 billion, as well as reduce its yearly cash interest payments by approximately 60%.

Wolfspeed said on Monday it has filed for Chapter 11 bankruptcy protection, as the chipmaker grapples with huge debt amid slowing demand from electric vehicle and industrial markets. Shares of the company — which makes chips using silicon carbide,