ITT Corp. (NYSE: ITT) shares are trading higher after the company announced this morning it expects to beat previously issued first-quarter and full-year profit outlook. ITT predicted first quarter earnings of 80 cents to 82 cents per share, and between $3.80 and $3.95 per share in 2008. Analysts forecast first-quarter earnings of 81 cents per share and full-year earnings of $3.93 per share. If you think that the stock 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 ITT.

After hitting a one-year high of $73.44 in July, the stock hit a one-year low of $50.94 in March. ITT opened this morning at $57.95. So far today the stock has hit a low of $56.84 and a high of $59.25. As of 12:15, ITT is trading at $57.26, up $0.81 (1.4%). The chart for ITT is bearish but improving while S&P gives ITT a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $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 7.5% return in just one month as long as ITT is above $50 at May expiration. ITT would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.

ITT hasn't been below $50 at all in the past year and has shown support around $52 recently. This trade could be risky if the company's earnings (due out on 4/25) disappoint, but even if that happens, that position could be protected by support the stock might find just above $50, where it bottomed out in the past month.

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 ITT.