Eastman Kodak Co. (NYSE: EK) announced this morning that it will end its Olympic sponsorship following the 2008 Summer Games in Beijing, as they reassess their marketing and attempt to move in a new direction. EK is moving significantly higher today on this news and not much else, so it looks like investors are happy with this move. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on EK.

After hitting a one-year high of $30.20 in June, the stock has up and down sharply within a $2-dollar range over the past three months. EK opened this morning at $27.24. So far today the stock has hit a low of $27.18 and a high of $28.44. As of 10:45, EK is trading at $28.20, up $1.16 (4.3%). The chart for EK looks neutral but improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $25 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 13.6% return in just 5 weeks as long as EK is above $25 at November expiration. Kodak would have to fall by more than 11% before we would start to lose money.

EK hasn't been below $25 since June and has shown support around $27 recently. This trade could be risky if the company's earnings (due out on 11/1) disappoint, but even if that happens, this position could be protected by strong support between $25 and $27, where EK has bottomed throughout the past three months.

Brent Archer is an options analyst and writer at Investors Observer.