Drawbacks: Crash insurance is expensive, and the tax rules on protective puts are somewhat unattractive.

FORBES: Investment Strategies

You could buy out-of-the-money protective puts--options that would make good some of your loss if the stock collapses.

FORBES: Magazine Article

Put sellers may be purging protective or bearish positions on HSBC post-earnings, or may be selling the puts outright to rake in available premium on the options.

FORBES: Traders Try On Talbots Options After Sycamore Partners Takes 9.9% Stake

We noted growing interest in XLY puts on Tuesday and Wednesday of this week, which suggested traders were hungry for varying degrees of protective or bearish positions on the sector.

FORBES: Regeneron Call Options Climb As Shares Soar On Roche's Setback