On Friday, Wall Street's favorite barometer of fear soared higher as investors scrambled in the wake of a sharp sell-off.

In fact, the VIX jumped more than 22 percent to its highest level since July.

As you may know the VIX often rises when stocks decline as investors bid up options to manage market risk.

With volatility returning to this market, how can you use options to protect yourself and hedge your bets. Options Action trader Mike Khouw explains all.

Watch the video now!

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Trader disclosure: On Oct. 30th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman Owns Puts (BAC); Finerman Owns (PDE), (FLS), (RIG), (WMT); Finerman's Firm Owns (MSFT), (NOK), (PDE), (RIG) (TGT), (WMT); Finerman's Firm  Is Long Puts (AMZN); Finerman's Firm  Is Long Puts (BAC); Finerman's Firm  Is Long Call Spreads (BAC); Finerman's Firm  Is Long (FLS); Finerman's Firm  Is Short Calls (FLS); Finerman's Firm  Is Short (IJR), (MDY), (SPY), (IWM), (UNG), (USO, Terranova Owns(GS); Seymour Is Short Puts (AA); Seymour Is Long Puts (BAC); Seymour Is Long Puts (BX); Seymour Is Long Puts (EEM); Seymour Is Long Puts (F); Seymour Is Short Puts (FXI); Seymour Is Long Puts (LVS); Seymour Is Long Puts (MSFT); Seymour Is  Short F (PBR); Seymour Is Long Puts (SBUX)

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