When we find ourselves in dangerous situation – and, for many, this market is certainly at a precarious point where fear is the prevalent emotion – our most-primitive instincts take over. That is, when we are forced into a tight spot, we are conditioned to make a choice to either fight or flee the threat.

Stock investors are incredibly vulnerable right now because there's little they can do to defend themselves. They can only buy and hold, or buy and fold by hightailing it to the exits when the going gets tough.

Stock traders cannot fight the tape. They cannot look at the now-routine 200-point Dow collapses, even with rose-colored glasses, and see anything good. Many are simply trying to wait out the rough periods, but as we've seen recently, the "good times" are often short-lived and the markets pull back almost effortlessly after each quick run-up.

Unlike option traders, stock traders must take their medicine and their very real losses. Either that or sell and bail out of the market. In short, they must flee because they have no choice.

Option traders do have a choice, a very appealing choice – we can fight – and, better yet, we can win. Unlike stock traders, we can buy put options and profit in downtrending environments quite easily and handsomely. Whether we're trading options independently of our long stock positions or we're using options to supplement or replace income that the stocks should be generating at any given time, we don't have to sit by and take the hits alongside the market.

Most investors are familiar and comfortable with buying call options, primarily because they are the easiest to understand. A call is simply a leveraged substitute for buying a stock. If the stock price rises, chances are the price of the call option will also rise and you'll participate in the stock's profit run. You do this by investing a fraction of the cost of the stock to control the shares.

That's easy enough. However, most investors are not as familiar with the call option's opposite, a put option. But they may shy away without knowing that a put isn't necessarily a "true" opposite.

Yes, calls are bets that a stock is going up and puts are bets that it's going down, but the risk/reward profile of buying calls and puts are the same. That is, whatever you spend to buy a call or a put is the most you can lose, and both have limited upside if you've either "called" it right or "put" your money in the right direction.

Many option traders hesitate to use puts to their full advantage. But here is all you need to know – a put option profits when a stock price falls. In fact, it is the existence of put options that makes options an "all-seasons" investment strategy.

So whether the market is rising or falling, you can use options to profit from a move in either direction.

Look, this is a crazy market by any measure. And I know for some of you it can be a little scary. But we options traders can be crazy like a fox and use our unique advantage – making money in a falling market – with puts.

But – and this is a very important "but" – this market is fully capable of snapping back with an out-of-the-blue 200-point gain.

I can't predict the daily snaps in the market. I don't think anyone can. But, while I can't pinpoint next week's temperature to the exact degree, I sure as heck know it's winter, even though some of you on the East Coast who are experiencing 70-degree weather in January might not concur!

Simply translated, that means we options traders have another advantage – we can diversify for bullish and a bearish scenarios.

Diversification, important in all investments, is critical when it comes to option buying. When I talk about diversification, I generally mean you should own both puts and calls, and a variety of each. But there is another type of diversification that also applies here –DIVERSIFY OVER TIME!

Don't buy a lot of option positions at one time. You are betting on market volatility. If the market goes to sleep (and it can sometimes for a year or so), you are in trouble. Your options will melt away and expire.

So, while we're extolling the virtues of having puts in your portfolio, don't take that as a message to forget about calls for a while. Quite the contrary, it's wise and even necessary to have calls in your portfolio during troubled times. Just like you probably don't sell all your stocks when the markets start to dip, having call options instead of (or in addition to) long stocks is an inexpensive way to be long the market and it's certainly less risky.

So, you want to enter option positions gradually over time, patiently waiting for the market or a stock to explode. Once you see the market waking up or making a clear and sustained move in one direction, you can increase your specific option buying activity.

Ken Trester's Maximum Options trading service offers up to 10 options trades per week. Complete with trading instructions, sell stops, target prices and alerts when it's time to cash out and move on to the next opportunity, he positions you for options profits all week long.  And to sweeten the deal, he's offering his Option Master software – which helps you to identify and evaluate options for trading on your own – absolutely FREE! Click here to take advantage of this special offer!