“There’s plenty of catalysts on the horizon to trigger an S&P drop, including the eurozone debt crisis, the standoff on the U.S. budget debt ceiling that’s around the corner, and even potential catalysts through unrest in the Middle East. Given the situation, the risk of a moderate to steep decline in equities is not trivial, though I would suggest buying a put butterfly [needing an 8.8% drop] as a hedge rather than as an outright position.”