NYSE Euronext, Inc. (NYSE: NYX) shares are rising on news that the company will purchase the American Stock Exchange for $260 million in stock. The deal will give a second U.S. license for an option exchange, and make it the nation's third-largest player in the $1.3 trillion options marketplace. An analyst at Jefferies & Co. said that the deal allows NYX both to increase its electronic trading business and remain in a traditional trading model, where it has excelled. 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 NYX.

After hitting a one-year high of $106.81 last January, the stock hit a one-year low of $64.26 in August. NYX opened this morning at $72.97. So far today the stock has hit a low of $72.66 and a high of $75.20. As of 10:35, NYX is trading at $72.44, up $3.35 (4.7%). The chart for NYX looks bearish 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 February bull-put credit spread below the $55 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 just one month as long as NYX is above $55 at February expiration. The NYSE would have to fall by more than 25% before we would start to lose money.

NYX hasn't been below $64 at all in the past year and has shown support around $70 recently. This trade could be risky if the company's earnings (due out on 2/05) disappoint, but even if that happens, this position could be protected by the support the stock might find around $70 where it bottomed in the late summer.

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