: Tail hedging with cash Vineer Bhansali in his book Tail Risk Hedging makes some claims regarding portfolio protection: For losses of 0% to -5%, just diversification For losses of -5% to -15%, alternative betas (momentum)

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Tail hedging with cash
Vineer Bhansali in his book Tail Risk Hedging makes some claims regarding portfolio protection:

For losses of 0% to -5%, just diversification
For losses of -5% to -15%, alternative betas (momentum)
For losses of -15% to -25%, explicit put options
For losses of -25% and bigger, cash

However, he doesn't clarify how exactly cash protects a portfolio against losses. What he meant to say was just to buy the stock when the price is low? I just can't see how this could protect against the loss. Any help would be appreciated.

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