Sit tight and steer clear of options.
That is one options strategist's advice to individual investors as U.S. stocks see unprecedented levels of volatility, with the Cboe Volatility Index, also known as the VIX or the market's fear gauge, sitting near all-time highs.
"My advice would be ... for a retail investor, to sit tight and stay away from the options market," Garrett DeSimone, head of quantitative strategy at analytics firm OptionMetrics, told CNBC's "Trading Nation" on Tuesday.
The VIX closed at its highest level ever — 82.69 — on Monday, above its financial crisis peak from 2008.
"These are all-time fear levels. So, an investor looking to get into hedges would find it very difficult to monetize those hedges quickly," DeSimone said. "My suggestion would be to take small bites [of] some of the companies that they're interested in and stay away from very highly leveraged firms."
In part, DeSimone's call for caution was tied to the fact that "the typical safety trade did not really work out" during the market's recent swings. Traditional "safe haven" sectors like utilities, consumer staples and real estate have plunged sharply along with the broader market in recent weeks, even as staples have taken a smaller hit than other groups.
Additionally, hedges against the widespread weakness "have been built up very significantly. The typical put buying we see has become very, very expensive," DeSimone said.
"So, I think the best alternative is to just hold onto cash right now and sit tight," he said.
What investors should be doing is keeping a close eye on the Federal Reserve, the strategist said.
"If we look forward to the balance-of-risk statement that's going to be released [Wednesday] ... the language should contain some information about their forward guidance, what next steps there might be," DeSimone said. "At the end of the day, this really is an economic supply shock, and reduced rates ... may cushion the blow, but they don't get people out of their homes and they don't get fans back in stadiums."
As such, the Fed could take experimental actions to combat the unprecedented volatility roiling markets, he said.
"They've already started by enacting the emergency lending facility for commercial paper, so, that's a step to ease some of the short-term credit tightening. But what they could also break out is a move where they start enacting stimulus for private credit," DeSimone said.
Stocks plunged Wednesday as Wall Street's swings continued.