Wednesday marks the fifth anniversary of the Flash Crash, when the S&P 500, Russell 2000 and Dow Jones industrial average collapsed in a matter of minutes, momentarily wiping out trillions of dollars in market cap in just a few seconds.
And as memories of the crash remain fresh in many investors' minds, some market participants are looking for the best way to protect their portfolio. With options prices low, one trader says there is a relatively inexpensive way to insure your portfolio.
"I think the best idea when it comes to hedging is to try to keep is simple," options trader Mike Khouw said Tuesday on CNBC's "Fast Money." Khouw noted that with the CBOE Volatility Index (the VIX) near all-time lows, prices for put options remain relatively cheap. A put option gives a trader the right to sell a stock for a set time and for a set price.