Coach Inc. (NYSE: COH) shares are rising today after the company reported fiscal second-quarter earnings of $252.3 million, or 69 cents per share, above analysts' estimates of 68 cents per share. The company said earnings were helped by an 18% rise in direct-to-consumer sales, as well as a 17.7% rise in factory same-store sales. 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 COH.

After hitting a one-year high of $54.00 in April, the stock hit a one-year low of $24.09 earlier this month. COH opened this morning at $27.37. So far today the stock has hit a low of $25.76 and a high of $30.00. As of 10:35, COH is trading at $29.36, up $1.87 (6.8%). The chart for COH looks bearish but improving, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $22.50 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 an 8.7% return in just two months as long as COH is above $22.50 at March expiration. Coach would have to fall by more than 23% before we would start to lose money.

COH hasn't been below $23 at all in the past year and has shown support around $24.50 recently. This trade could be risky if the weak economy drags retail stocks lower over the coming months, but even if that happens, this position could be protected by the support the stock might from the reaction to this morning's earnings.

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 COH.