What index options strategy should be recommended for protecting against short-term market decline while allowing for long-term appreciation?

Buying puts is an effective strategy for protecting against short-term market declines while still allowing for long-term appreciation in the underlying asset. When an investor buys put options, they acquire the right to sell the underlying asset at a predetermined strike price within a specified time frame. This means that if the market were to decline, the investor could exercise the put option, which would help offset losses in their long positions.

This strategy provides a form of insurance against adverse market movements. The investor can hold onto their long-term investments with the confidence that any potential short-term declines can be mitigated through the puts. This approach allows for participation in potential long-term appreciation while having a safety net in the form of the put options.

In contrast, buying calls is a bullish strategy that profits from market increases, but it does not provide protection against declines. Selling protective puts entails collecting premiums for potential future obligations, which does not provide protective measures. Selling covered calls generates income but limits upside potential in a rising market and does nothing to protect against downturns. Therefore, buying puts is the most appropriate strategy for the scenario provided.