"Accentuate the positive, eliminate the negative, latch on to the affirmative, don't mess with Mister In-Between," was a song made famous by Mr. Bing Crosby and should be the theme song of every trader taking control of their own future in these volatile markets.

Why, you ask? Never before have retail traders had so many opportunities in front of them. ETF's, inverse ETF's, efficient/liquid option markets, futures, and an incredible broker are just a few. So as the market continues to melt, and as DC continues to re-arrange the deck chairs on the Titanic, let's take a closer look at three things that you can do to protect yourself in this market.

1- Covered Calls- If you still own stock, and with a VIX in a range between 40 and 55, option premiums are flat out incredible. If you have a stock you're betting on for the long term and you haven't been hedging that position through covered calls, reconsider. It can cut losses dramatically and can even produce gains.

2- Spread Trades- On this Daily Swim blog you have the best traders discussing certain defined risk strategies for certain market situations. Look in the archives and do your research. In a market that continues to fall, with a vicious bull rally around the corner, you want to put trades on that allow you room to be wrong in your technical analysis and still make money. For some, the bread and butter trades for the last couple months have been Calendar Spreads and Short Call Verticals. Calendars because the VIX is going nuts and short verticals because we are falling off a cliff.

3- Portfolio Hedges- If you find your overall account too bullish, either because you tried to pick the bottom or because the market has blown through your spreads, consider the following:

a. Inverse ETF's such as the SDS (double inverse of the SPY), DXD (double inverse of the DIA), QID (double inverse of the QQQQ), can help remove some of those unwanted bullish deltas. For example, if you have a position that is +200 SPY deltas and you find the market continuing to go down, you can buy 50 shares of the SDS to cut your delta position in half, or 100 shares of the SDS to become neutral.

b. Futures- this is a product that should be used with caution, it does have unlimited risk to it. Futures like the /ES (S&P 500 e-mini) can be one of the quickest ways to hedge against a fast moving market. One contract of the /ES equals 500 SPY deltas. If your deltas are completely out of control and you need a life preserver for your account, the /ES can be an immediate quick fix.

These are just a few reasons why it's a great time to be in control of your own trading. Think about how good you have it as a retail trader.

Trade Smart and Profitable.

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thinkorswim, Inc. and its registered employee, Joe Kinahan, do not solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.