Urban Outfitters (URBN) on the move after presentation

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $17.50 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 two months as long as URBN is above $17.50 at March expiration. Urban outfitters would have to fall by more than 30% before we would start to lose money.

URBN hasn't been below $19 at all in the past year and has shown support around $23 recently. This trade could be risky if the company's earnings (due out on March 6) disappoint, but even if that happens, this position could be protected by the support the stock might find at its 200 day moving average, which is currently around $24.

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 URBN.