The simplest way to avoid disaster in volatile markets is to hold extra cash.

This does not mean sell everything and climb into your bunker for the winter. However, carefully trimming some losing positions and watching your stop losses on winners is important.

You should also be on the look out for opportunities as there are always some around.

Philip Morris (PM) has been a great stock to sell for income. Sales and profits are fairly stable overtime and profit margins are outstanding at 27%. The stock has had a wild ride over the last year ralling to new highs and then recently falling 37%. This decline is our opportunity with valuations cheap and dividend yield high.

Right now, Philip Morris shares trade with an EV/EBITDA of 12.4.

With the fall in price PM now pays a larger dividend than any other time since 2009.

We can do even better buy selling put options for upfront cash.

Sell to open, the January 18, 2019, $82.50 puts on Philip Morris for $1.70 using a limit order. Get paid 2.1% upfront for agreeing to buy shares at a 3% discount to recent stock prices.

At expiration if shares are above $82.50: put sellers will keep the $1.70 free and clear for a 17.5% annualized return.

At expiration if shares are below $82.50: put sellers will buy shares at a 5.4% discount to yesterday's closing price (including the payout).

For protection use a stop loss at $74.50. Shares will have made new lows and is best to take a small loss than risk larger investment declines.

Take advantage of market volatility today.