If you think the market is going to go down, one way to profit from that is to buy puts. These are stock options that give the holder the right to sell a specific stock, at a specific price, and within a specific timeframe in the future.
But buying puts isn't for the faint of heart. As analyst John Maxfield discusses with host Gaby Lapera in this week's episode of Industry Focus: Financials, investors will want to be careful before incorporating these types of instruments into their investing approach.
A full transcript follows the video.
Source: Fool.com