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Ford Motor Co (NYSE: F) shares are falling after the company announced today that the current surge in oil prices is forcing the company to shift its production levels and start to shift on smaller cars. As a result the company stated that it will not be able to become profitable next year, which had been the previously stated goal. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on F.

After hitting a one-year high of $9.70 in June, the stock fell steadily throughout the year to notch its one-year low of $4.95 in March. This morning, F opened at $7.49. So far today the stock has hit a low of $7.13 and a high of $7.49. As of 11:50, F is trading at $7.07, down 0.73 (-9.36%). The chart for F looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $9 range. A bear-call credit spread is an options position that combines the purchase and sale of call 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 11.1% return in four months as long as F is below $9 at September expiration. Ford would have to rise by more than 25% before we would start to lose money. Learn more about this type of trade here.

F hasn't been above $9 by more than a few cents since almost a year ago and has shown resistance around $8.45 recently. This trade could be risky if the company's earnings (due out in late July) are a positive surprise, but even if that happens, this position could be protected by resistance just above $8, where F topped out in October, as well as just recently.

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 F.

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