Sony (SNE) CEO Stringer has optimistic outlook for PS3

Sony Corp (NYSE: SNE) CEO Sir Howard Stringer said in a recent interview that despite its troubles in generating sales in its first year, SNE's PlayStation 3 console should make a comeback as popular game titles like Grand Theft Auto IV hit the market. 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 SNE.

After hitting a one-year high of $57.92 last May, the stock hit a one-year low of $39.52 in April. SNE opened this morning at $50.81. So far today the stock has hit a low of $50.27 and a high of $50.81. As of 12:55, SNE is trading at $50.37, up 1.94 (4.0%). The chart for SNE looks bullish 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 an October bull-put credit spread below the $40 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 9.9% return in just five months as long as SNE is above $40 at October expiration. Sony would have to fall by more than 33% before we would start to lose money. Learn more about this type of trade here.

SNE hasn't been below $40 by more than a few cents at all in the past year and has shown support around $48 recently. This trade could be risky if the company's earnings (due out in late July) disappoint, but even if that happens, this position could be protected by the support the stock might find around $40, where it bottomed out in April.

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 SNE.