Hedging with options, overall performance, risks & chances. Are protective puts suitable to get through difficult market environments

Abstract

High inflation, the war, job layoffs, the energy crisis and other events recently reminded investors of the risks that investing into the stock market bears. But how to behave in such difficult times? Sell risky assets at the current price to limit further losses and shift towards safer investments like bonds? This Paper is concerned with an investigation of whether a specific hedging strategy using options is a solution to get through difficult market environments.