Lehman Brothers (NYSE: LEH) shares are falling with other investment banks on news that Citigroup (NYSE: C) is in the process of cutting 6,500 jobs in its investment banking division. The move reflects the deterioration of market conditions over the past year, and seems to have investors worried about the health of the industry. 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 LEH.

After hitting a one-year high of $78.86 last June, the stock hit a one-year low of $20.25 in March. This morning, LEH opened at $24.15. So far today the stock has hit a low of $3.20 and a high of $24.35. As of 12:25, LEH is trading at $23.26, down 0.94 (-3.9%). The chart for LEH looks bearish and steady, 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 an October bear-call credit spread above the $40 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 a 4.2% return in four months as long as LEH is below $40 at October expiration. Lehman would have to rise by more than 70% before we would start to lose money. Learn more about this type of trade here.

LEH hasn't been above $40 since mid-May and has been falling steeply recently, displaying resistance around $24. This trade could be risky if the financial sector turns things around shortly, but even if that happens, this position could be protected by resistance LEH might find at its 50-day moving average, which is currently around $38 and falling.

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 LEH or C.