In volatile markets, options can be used for hedging. Investors can buy put options to protect against downside risk. For example, if an investor holds a large position in a cryptocurrency and is worried about a potential price drop, they can purchase put options at a strike price close to their entry point. This gives them the right to sell the cryptocurrency at the strike price, limiting their losses. Additionally, they can sell call options to generate income, which can offset some of the costs associated with buying put options.