When trading stocks and futures, the simplest way to reduce the risk of large losses is to enter a stop-loss order — a price that triggers an exit at a predefined loss level. Selecting the best stop-loss point isn’t easy, though. If the market moves just below or above the stop-loss before continuing in its original direction, you’ll be stopped out as you watch the market move as originally expected. Traders often try to avoid this most frustrating aspect of trading by placing stops just below support or above resistance, but because major support or resistance levels are widely known, they can be violated just before the market reverses direction. Buying options instead of placing stops is a way to avoid this "whipsaw" trap.