Options offer a way to hedge downside risk when investors feel uncertainty and want to protect against downside losses without liquidating their stock holdings. The put option allows an investor to sell stock at the strike price which protects the investor from losses as the stock price moves below the strike price. Of course the purchase of put options requires the premium to be paid. Put protection can be viewed like buying insurance for a specified time to hedge against losses past a certain price point.
MarketChameleon.com offers a tool called the Put Protection Report that shows the cost of put protection for popular stocks and stocks of the investor’s choosing.