Gilead Sciences Inc. (NASDAQ: GILD) shares are trading higher this morning in anticipation of a presentation by COO John F. Milligan, Ph.D. at the 19th Annual Piper Jaffray Healthcare Conference in New York. Milligan will will provide an overview of the company at 11:00 a.m. Eastern, which will be webcast on the company's website, www.gilead.com. 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 GILD.

After hitting a one-year high of $47.65 earlier this month, the stock has dropped off slightly. GILD opened this morning at $42.66. So far today the stock has hit a low of $42.36 and a high of $43.72. As of 11:15, GILD is trading at $43.52, up $1.61 (3.8%). The chart for GILD looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a February 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 6.4% return in just 3 months as long as GILD is above $35 at February expiration. Gilead would have to fall by more than 19% before we would start to lose money.

GILD hasn't been below $35 since March and has shown support around $42 recently. This trade could be risky if one of the company's drugs runs afoul of the FDA, but even if that happens, this stock could be protected by strong support GILD found around $36 in August. Plus, the stock could find support at its 200 day moving average, which is currently at $40 and rising.

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