UnitedHealth Group (UNH) lifted by Q4 earnings, reaffirmed forecast

UnitedHealth Group (NYSE: UNH - option chain) shares have moved higher today after the company reported a fourth-quarter profit of $726 million, or 60 cents per share. UNH's adjusted profit of 78 cents per share matched analysts' projections. The company also reaffirmed its 2009 earnings forecast of $2.90 to $3.15 per share. 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 UNH.

UNH opened this morning at $25.44. So far today the stock has hit a low of $25.25 and a high of $27.30. As of 12:00, UNH is trading at $26.52, up $1.47 (5.9%). The chart for UNH looks neutral and S&P gives UNH a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $20 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 two months as long as UNH is above $20 at March expiration. UNH would have to fall by more than 24% before we would start to lose money. Learn more about this type of trade here.

UNH hasn't been below $20 since early in December and has shown support around $23.50 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 UNH.