How can you use options to hedge risk?

"Covered Call" is one of the best hedging strategies. One can earn rental income from his own portfolio (so to say). It is best to initiate the trade 40 to 45 days prior to expiry.

La principal estrategia que utilizaría sería comprar calls, opciones de compra. La segunda estrategia sería comprar un Call spread buscando abaratar el precio de los calls pero delimitando mi utilidad ya que compro un call y vendo otro call a un nivel mas alto con misma fecha de vencimiento apostándole a quedar dentro de ese rango La tercera opción es mas agresiva pero es mi favorita ante un escenario completamente al alza y compraría collares o risk reversal, es decir buscaría vender un PUT por debajo del nivel de mi call y esa prima que recibiría por vender el PUT se la inyectária a los calls que compraría así abarataría la compra de calls e incluso podría llegar a ser costo $0.00 está estrategia

Covered call and collar strategies are two effective ways to hedge bullish trades. A covered call can be used when we are bullish on a stock and want to generate additional income from their existing holdings. We can sell call options against the stock we own. On the other hand, the collar strategy involves simultaneously buying put options to protect against downside risk and selling call options to generate income and offset the cost of buying the puts.

Shorting out of the money strangles around binary events works well or simply use for time decay purposes. This strategy is a staple in options strategies.

Hedging a bearish position can be achieved by purchasing put options. This is a simple method where you gain the right to sell the underlying asset at a predetermined price, also known as the strike price, before the option expires. Selling call options can be another useful strategy to hedge against a bearish market. When you sell call options, you receive a premium upfront, which provides income if the asset price stays below the strike price of the call option.

💫 Personally I found Stock Options Complex as in my Opinion they can lead to Huge Financial Losses as they are Complex in Features so I ruled them out . 💫 I would talk about Index Options but only of Nifty 50 as Nifty 50 Bees ETF of Nippon India is the Most Liquid ETF in India , even Liquid than Nifty Bank Bees of Nippon so that's why Ruled out Bank Bees for Investment Purposes . 💫 So , to Hedge Nifty 50 Bees Investment , one can Buy Weekly " ITM " Put Index Options for Hedging Purposes ( Only +150 Points Gap from Spot and not > than it ) if one is Bearish . Expiry Day Rules can be Tricky so one must square off The Put of " 100 " Strike " Only " before the Expiry . 💫 Possible Max. Target can be : 400 - 500 Points ( My View ) .

Options can also be looked as insurance to address volatility in turbulent times only gamma and time decay i.e. theta to be considered properly

Specialized insurance products could also be leveraged to hedge risks. To this date no mainstream player is selling such products but it would be a viable way to achieve massive risk reduction.