Boston Scientific (NYSE: BSX) shares are trading higher after the company announced its chief executive officer, Jim Tobin, will remain with the company and shift his focus to day-to-day operations. 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 BSX.
After hitting a one-year high of $16.67 last June, the stock hit a one-year low of $10.76 in January. BSX opened this morning at $13.20. So far today the stock has hit a low of $13.16 and a high of $13.56. As of 12:45, BSX is trading at $13.36, up$ 0.25 (1.9%). The chart for BSX 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 a November bull-put credit spread below the $10 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 six months as long as BSX is above $10 at November expiration. BSX would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.
BSX hasn't been below $10.75 at all in the past year and has shown support around $12.50 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 at its 200 day moving average, which is currently around $13 and rising.
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 BSX.
Tiffany's serves up solid quarterly earnings
Cramer on BloggingStocks: This bullish retail story looks like a good fit 
Top growth fund manager sours on Apple, U.S. tech
