For the investor hedging 1,000 Disney shares, the cost equaled 10.4 percent annualized, including commission.

The new trading vehicles will enable investors to hedge their bets.

But several analysts say investors should hedge their bets.

These markets and indexes are valuable as a way to help investors hedge risk.

Thus estimating market expectations of correlation of stocks can help investors to hedge their risk in the long term.

"This is a lesson in why a smart investor would hedge their Pipe investment," he said.

Professional investors, however, can hedge more efficiently with a huge array of futures, options and other derivatives developed over the last several years.

Judging by sales of inflation-indexed government bonds, investors are hedging their bets.

No wonder, then, that the more cautious Japanese investor is hedging his or her bets.

Of course, options trading cannot take place in any meaningful volume if investors cannot hedge their positions by selling short.