For the past couple days, I was at the Card Forum & Expo in Miami. There was a lot of buzz about debit cards, alternative payments – such as BillMeLater.com and Revolution Money – as well as mobile applications.

But there was also lots of talk about the recent buyout deal -- Discover Financial Services (NYSE: DFS) agreed to purchase the Diners Club International network from Citigroup (NYSE: C). The price tag came to $165 million.

Actually, Diners Club is a pioneer, having created the first major platform for charge cards (back in 1950).

No doubt, it was mainly for the affluent, and in the world of credit cards, Diners looks more like a niche player. So why the interest from Discover?

Basically, it's a way to move more aggressively into global markets as cards from Diners are accepted in more than 185 countries.

According to Discover, the deal is expected to add $10 million to $15 million in annual pre-tax profits – which is certainly good news. So, in yesterday's trading, Discover's stock price was up 5.5% to $18.09.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Citigroup Inc. (NYSE: C) shares are rising after a few news items regarding the company. First, C named Mark Rufeh as chief administrative officer and head of productivity for the institutional clients group. Rufeh is known as a cost-cutter, and the company hopes he can restore efficiency and discipline. Discover (NYSE: DFS) also agreed to buy Diner's Club from Citi. Lastly, most banks are getting a boost from the news that Washington Mutual (NYSE: WM) may get as much as a $5 billion investment. 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 C.

After hitting a one-year high of $55.55 in May, the stock hit a one-year low of $17.99 in March. C opened this morning at $24.85. So far today the stock has hit a low of $24.61 and a high of $25.19. As of 12:45, C is trading at $25.11, up $1.03 (4.2%). The chart for C looks neutral but improving, 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 June bull-put credit spread below the $17.50 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 8.7% return in just two and a half months as long as C is above $17.50 at June expiration. Citi would have to fall by more than 30% before we would start to lose money.

C hasn't been below $17.50 at all in the past year and has shown support around $21.50 recently. This trade could be risky if the US economy turns out not to have hit bottom yet, but even if that happens, this position could be protected by the support the stock might find around $20, where it found support twice in the past month.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in C or DFS. He does control a bullish hedged play on WM that could be doing better.