If you agree with Baron Rothschild’s suggestion to enter the markets "when there is blood on the streets," you might have bought stocks after the Dow Jones Industrial Average fell 2.64 percent (366 points) on Oct. 19 — the 20th anniversary of the 1987 stock market crash when the Dow plunged 22.6 percent in one day.

Rothschild knew fearful investors often panic and sell high-quality stocks at a discount and that buying on a dip can generate profits.

For options traders, however, this is easier said than done. When implied volatility (IV) spikes during market sell-offs, calls can become prohibitively expensive.

So how can you make money after the underlying tanks?