Novartis (NYSE: NVS - option chain) shares have moved higher today after after a writer at the Financial Times said in an article that the company exemplifies "the resilience of the European pharmaceuticals sector in turbulent times." The article notes that Novartis is a favorite among pharmaceutical-sector analysts, and that the company's cost cuts have boosted its bottom-line despite the economic downturn. 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 NVS.

NVS opened this morning at $49.34. So far today the stock has hit a low of $48.67 and a high of $49.46. As of 12:20, NVS is trading at $49.26, up $1.06 (2.2%). The chart for NVS looks neutral and S&P gives NVS a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $40 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 4.2% return in just six weeks as long as NVS is above $40 at February expiration. Novartis would have to fall by more than 18% before we would start to lose money. Learn more about this type of trade here.

NVS hasn't been below $41 at all in the past year and has shown support around $44 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 NVS.

While the euro has risen by as much as 40% against the dollar since 2002, emerging market currencies have only seen gains of 17%.

Should investors sniff an opportunity?

Well, yes and no.

An article out this morning by the Financial Times examines this disparity.

The FT says, "Fear is part of the answer. Investors haven't forgotten the emerging market currency devaluations of the 1990s and early 2000s. For them it's 'no thanks, too risky.'"

Investors already hold emerging market equities in their portfolios, and according to the FT, investors might feel that these equity positions suffice for currency exposure.

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