Bear Stearns Companies Inc. (NYSE: BSC) opened at $118.51. So far today the stock has hit a low of $114.49 and a high of $118.80. As of 10:50, BSC is trading at $115.17, down $3.03 (-2.6%).

After hitting a one-year high of $172.61 in January, the stock has fallen dramatically over the past few months, finally rebounding off support in the low $100's earlier this month. The stock jumped late last week after the Fed's rate cut, but with little on the news front today, BSC is retreating slightly as excitement wears off and investors remain cautious about the state of the financial sector. Technical indicators for BSC are bearish and steady, while S&P gives the stock a very negative 1 STARS (out of 5) sell rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $140 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk and leverage returns. For this particular trade, we will make a 6.3% return in just 5 weeks as long as BSC is below $140 at September expiration. BSC would have to rise by 21% before we would start to lose money.

BSC has not been above $140 in the past month and has basically been in a free-fall over that time period, with some resistance around $121. This trade could be risky if the mortgage issues clear up, but that seems unlikely in only one month.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent neither owns nor controls positions in BSC.