When you take a market that's very complacent with very high valuations that's already beginning to show signs of leakage, it doesn't really take much to really accelerate things and and throw the fuel onto the fire.
Using a protective put with a covered call is a combination options strategy that can help manage risk and generate income in a stock position. When markets crash, this is the right strategy to protect your capital.
Charlie Munger, the longtime business partner of Warren Buffett, once voiced his disapproval of introducing young people to active stock trading, likening it to initiating them into heroin use.
Though nobody likes to see their stocks get hammered, the recent negative price action could be a blessing in disguise from a long-term standpoint, allowing investors to scoop up shares at a relative discount and ride the wave back up.
