Editor's Note: This story was originally published June 11, 2003 on RealMoneyAfter a large advance in the broad markets, you might consider taking some chips off the table. However, if you want to maintain exposure to a particular position, you have a number of alternatives available, such as the use of options. Although put options provide a direct hedge, the drawback is that you have to pay a premium, the value of which erodes with time. Also, as a stock moves, the delta of the option contract changes, so the position needs to be actively managed to ensure the desired level of protection -- the more the position is adjusted, the higher the transaction costs involved. Exchange-traded funds, or ETFs, don't offer as close a hedge as options do on a particular position, but they have other advantages in protecting your portfolio if you want to reduce some risk and still keep the underlying stock positions.