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Boston Scientific (NYSE: BSX) shares are trading higher after the company announced its chief executive officer, Jim Tobin, will remain with the company and shift his focus to day-to-day operations. 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 BSX.
After hitting a one-year high of $16.67 last June, the stock hit a one-year low of $10.76 in January. BSX opened this morning at $13.20. So far today the stock has hit a low of $13.16 and a high of $13.56. As of 12:45, BSX is trading at $13.36, up$ 0.25 (1.9%). The chart for BSX looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $10 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 six months as long as BSX is above $10 at November expiration. BSX would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.
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