Suntech Power Holdings Co. Ltd. (NYSE: STP), a Chinese solar cell company, announced this morning a $1.5 billion contract with Asia Silicon to purchase high-purity polysilicon over the next seven years. The contract secured lower prices for STP than any of its other existing polysilicon contracts. 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 STP.

The stock has been gaining over the past two months, and today's sharp jump propelled shares to a new 52-week high. STP opened this morning at $49.89. So far today the stock has hit a low of $49.03 and a high of $54.70. As of 10:50, STP is trading at 54.55, up 7.61 (16.2%). The chart for STP 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 5.3% return in just 3 months as long as STP is above $35 at January expiration. Suntech would have to fall by more than 24% before we would start to lose money. Learn more about this type of trade here.

STP hasn't been below $35 by too much since June and has shown support around $39 recently. This trade could be risky if the Chinese economy does not remain strong, but even if it happens, this position could be protected by strong support between $35 and $39, plus the stock's 200-day moving average, which is currently at $37 and rising.

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 STP.