You don't necessarily, imagine you have $100million of Apple shares. You bought share and thus you are said to be "long". If you were to engage in transactions to protect that $100Million you would actually cause a change in the price, you can't move in and out of the position quickly. If you are scared that apple might come out with bad sales number for the iphone you could buy your self some put options to protect yourself incase they do. The put options act as a hedge against downside risk, allowing you to stay "long" $100Million worth of Apple shares while not having to worry about a short term loss due to the fluctuations in the price from the iphone news. If apple does not go down you end up just losing the premium you paid for the puts.