Steel Dynamics Inc. (NASDAQ: STLD) has hit a new one-year high today despite the financial sector's woes after the company's CEO said that 2008 earnings could exceed Wall Street expectations. Most steel-makers are getting a lift today from this good news. 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 STLD.

STLD rose during the early part of this year but has been generally sideways for the past six months. STLD opened this morning at $47.95. So far today the stock has hit a low of $47.58 and a high of $50.56. As of 11:20, STLD is trading at 50.04, up 1.80 (3.8%). The chart for STLD looks bullish and steady, 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 January bull-put credit spread below the $35 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 4.2% return in 3 months as long as STLD is above $35 at January expiration. Steel Dynamics would have to fall by more than 30% before we would start to lose money. Learn more about this type of trade here.

STLD hasn't been below $35 since March and has shown support around $45 recently. This trade could be risky if the company fails to meet now-raised expectations, but even if that happens, this position could be protected by the two times that STLD bounced just above $35 in the past 8 months.

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

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in STLD.