It’s never a bad idea to know how to minimize your equity exposure, especially right now, as the market is showing some cracks in its armor lately. The S&P 500 was down roughly 5% in September, the first down month in 2021 since January, and the largest since the pandemic hit in March 2020.
Granted, September tends to be a more volatile month than most–plus, quarter-end positioning can skew the numbers as well. Nevertheless, the third quarter ended on a down note. It can be a vital reminder that the markets don’t always behave.
Fortunately, there’s a straightforward solution to protecting your downside exposure: hedging with options.
This article originally appeared at Investors Alley.