Final answer:
Roger should consider buying a put option to act as insurance against a decline in the stock price and limit his potential loss. The cost of the put option is a factor to weigh against the risk he is willing to accept.
Step-by-step explanation:
If Roger owns shares of Stelco Inc. and is planning to sell them within six to nine months, but is worried about potential losses from a decrease in stock price, the most appropriate recommendation would be to utilize options, specifically a put option. A put option gives Roger the right, but not the obligation, to sell his shares at a predetermined price, known as the strike price, within a certain period of time. This strategy acts as a form of insurance against a decline in the stock price, thus limiting his potential loss to the cost of the put option plus any difference between the stock's selling price and the strike price if the stock price indeed falls below the strike price.
However, if the stock price remains stable or increases, Roger may not exercise the put option and only loses the premium paid for this option. It is important for him to consider the cost of the put option versus the potential risk of loss he is willing to take.