The Nasdaq dropped 2% yesterday as widespread panic pulled down equities across the board. However, Paul Moore says tech stocks offer good long-term opportunities. He says the best way to hedge risk on individual company shares is with put options. Alternatively, tech-sector ETFs or a market index such as PowerShares QQQ Trust (NASDAQ:QQQQ) will diversify risk across the industry.

This from the Smart Profits Report:

I believe there are opportunities to buy technology stocks if you have a long-term outlook.

In the current climate, however, the best strategy to use is to buy the shares, then buy a put (known as a “married put”) as a hedge against the stock position.

You can also buy technology sector-specific ETFs, or a market index like the PowerShares QQQ Trust (NASDAQ:QQQQ), which eliminates the risk from a specific company.

As the market indexes eventually find a bottom and rebound, tech company shares — and indeed shares of other companies — will also stabilize over the next 12 months.

However, if a highly influential heavyweight company like General Motors (NYSE:GM), which plunged 33% to its lowest level since 1950 on Thursday, or Morgan Stanley (NYSE:MS), is forced into bankruptcy (despite GM defiantly stating that this won’t happen), there’s a real possibility that we could see a four-digit decline for the Dow Industrials index.

In sum, the longer-term trend is up but the path to stability may hide some sizeable potholes.

That’s why it’s essential you give yourself the best chance to emerge from this mess with as few bruises as possible.

Source: 3 Safe Ways to Invest In Technology… Despite the US Economy and Fuzzy Math