Symantec (NASDAQ: SYMC - option chain) stock is falling today after the company reported a first-quarter loss of $249.4 million, or 30 cents per share. SYMC's adjusted profit of 38 cents per share met analysts' forecasts of 38 cents per share, but the company's revenue of $1.47 billion missed projections of $1.52 billion. 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 SYMC.This morning, SYMC opened at $16.04. So far today the stock has hit a low of $14.48 and a high of $16.09. As of 11:35, SYMC is trading at $15.00, down $2.59 (-14.7%). The chart for SYMC looks neutral and S&P gives SYMC a neutral 3 STARS (out of 5) hold ranking.
For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $19 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 an 11.1% return in six months as long as SYMC is below $19 at October expiration. Symantec would have to rise by more than 26% before we would start to lose money. Learn more about this type of trade here.
SYMC hasn't been above $19 since October and shown resistance around $18 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 SYMC.
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