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Corning (GLW - option chain) shares are rising today after the company's CFO Jim Flaws said in an interview on CNBC last night that demand for LCD panels used in flat-panel televisions and netbooks has been "outstanding." He added that GLW's customers have seen a "surge in LCD television demand." 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 GLW.GLW opened this morning at $19.02. So far today the stock has hit a high of $19.32 and as of 11:50 is trading near its low of the day at $18.91 up 6 cents(0.3%). The chart for GLW looks bullish and S&P gives GLW a positive 4 STARS (out of 5) buy ranking.
For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $17 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 a 14.3% return in two months as long as GLW is above $17 at February expiration. Corning would have to fall by more than 10% before we would start to lose money. Learn more about this type of trade here.
GLW has not been below $17 since December 1 and has shown support around $17.40 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 GLW.
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