I was watching this video on using Protective Puts to hedge a Long stock investment against a downturn in the stock. I thought this was brilliant (not having ever traded with Options before).

This leads to a couple of questions:

1. Wouldn't it always be wise to buy Puts on a stock trade that is fairly expensive, as most are? In other words, if I was going to buy 200 shares of IBM at a cost of $36,000, wouldn't it make sense to have a couple of Puts to insure against a downturn. (Like we had a month or two ago).

2. Why don't any large brokerage Financial Adviser's ever suggest this method? I could have saved a bundle in 2001 and 2008. Thank you Merrill Lynch and Wachovia.