Starwood Hotels & Resorts (NYSE: HOT) shares are falling today after competitor Marriott International (NYSE: MAR) reported Q2 earnings that dropped year-over-year and said it expects weak economic growth and soft U.S. lodging demand to persist into 2009. This could be a bad sign for HOT, which reports earnings in two weeks. 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 HOT.

After hitting a one-year high of $75.29 last July, the stock has hit a new one-year low today. This morning, HOT opened at $36.81. So far today the stock has hit a low of $35.23 and a high of $36.82. As of 12:05, HOT is trading at $35.77, down 1.63 (-4.4%). The chart for HOT 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 a November bear-call credit spread above the $50 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 6.4% return in four and a half months as long as HOT is below $50 at November expiration. Starwood would have to rise by more than 39% before we would start to lose money. Learn more about this type of trade here.

HOT as been above $50 as recently as late May but has shown resistance around $39.50 recently. This trade could be risky if the company's earnings (due out on 7/24) are a positive surprise, but even if that happens, this position could be protected by resistance HOT might find at its 200-day moving average, which is currently around $50 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 HOT or MAR.