How to use options to hedge in a volatile market?
@OptionsTutor:
The selloff came after Fitch Ratings downgraded U.S. government debt from AAA to AA+ on Aug.1. All three major U.S. Indexes struggled last week, with the $S&P 500(.SPX)$ and the $NASDAQ(.IXIC)$ lost more than 2%, each.On Aug. 8, Moody's cut credit ratings of several small to mid-sized U.S. Banks, and said it may downgrade some of the nation's biggest lenders, warning that the sector's credit strength will likely be tested by funding risks and weaker profitability.Some market participants were concerned the signal could spell more trouble for markets ahead, but others say the pullback is expected given the extraordinary rally in equities this year.Option hedging strategies work best if you're already