Akamai Technologies Inc. (NASDAQ: AKAM) stock is declining today after an analyst with Cowen & Co. cut his rating of the stock to "Neutral" from "Outperform" this morning on fears of increased competition. 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 AKAM.

After hitting a one-year high of $59.69 in February, the stock hit a one-year low of $27.75 in September. This morning, AKAM opened at $36.01. So far today the stock has hit a low of $34.53 and a high of $36.35. As of 11:55, AKAM is trading at $34.68, down $2.42 (-6.5%). The chart for AKAM looks bullish and steady, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.

For a bearish hedged play on this stock, I would consider a February bear-call credit spread above the $45 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 7.5% return in two months as long as AKAM is below $45 at February expiration. Akamai would have to rise by more than 28% before we would start to lose money. Learn more about this type of trade here.

The Internet is a busy place and sometimes the traffic patterns can stand in the way of business efficiency. There is an outfit in Cambridge, Massachusetts that runs interference for big clients, keeping their Web performances up to proper corporate standards.

Akamai Technologies (NASDAQ: AKAM) provides services for the delivery of enterprise Internet content. Through its network of some 15,000 servers in nearly 70 countries, Akamai analyzes and manages Web traffic, transmitting client content through the server geographically closest to the consumer. The company also offers audio and video streaming services, business intelligence and content targeting applications, as well as on demand pay-as-you-go extra capacity to avoid network congestion during periodic spikes in traffic. Clients include Adobe Systems (NASDAQ: ADBE), FedEx (NYSE: FDX) and XM Satellite Radio (NASDAQ: XMSR).

The stock rose last week, on word the firm had launched a service to boost the speed and quality of e-mail, voice over IP services and file transfers within an organization. The service also speeds up access for employees using wireless and remote fixed-line networks. Akamai said expanding companies need such services, as employees and business partners become more dispersed. AmTech Research subsequently initiated the stock with a "buy" and a $50 price target.

Akamai Technologies Inc. (Nasdaq: AKAM) shares are trading higher today after AmTech Research initiated coverage on AKAM with a buy rating. Also today, AKAM named Jill A. Greenthal, an adviser at Blackstone Group (NYSE: BX) to its board of directors. If you think that the company 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 AKAM.

After hitting a one-year high of $59.69 in February, the stock dropped to a 52-week low of $27.75 in September. AKAM opened this morning at $36.11. So far today the stock has hit a low of $36.09 and a high of $37.94. As of 12:52, AKAM is trading at $37.30, up $1.68 (4.7%). The chart for AKAM looks bullish but improving, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $25 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. This particular trade, will make a 4.2% return in just 3 months as long as AKAM is above $25 at January expiration. Akamai would have to fall by more than 33% before we would start to lose money.

AKAM hasn't been below $25 at all in the past year and has shown support around $31 recently. This trade could be risky if the company's earnings (due out on 10/24) disappoint, but even if that happens, this position could be protected by strong support between $29 and $31, where AKAM has held firm for the past two months.

Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: At publication time, Brent neither owns nor controls positions in AKAM.