Gol Linhas Aereas Inteligentes (NYSE: GOL - option chain) shares are rising today after the company reported a second-quarter profit of 353.7 million reals ($192 million) on revenue of 1.39 billion reals ($754 million). Analysts had predicted revenue of $708 million. 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 GOL.GOL opened this morning at $9.11. So far today the stock has hit a low of $9.05 and a high of $9.40. As of 11:35, GOL is trading at $9.28 up 63 cents (7.3%). The chart for GOL looks bullish and S&P does not currently have a STARS rating for GOL.
For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $7.50 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 11.1% return in two months as long as GOL is above $7.50 at October expiration. Gol would have to fall by more than 19% before we would start to lose money. Learn more about this type of trade here.
GOL has shown support around $7.60 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 GOL
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