NEW YORK, Nov 8 (Reuters) - Fear has plunged in the U.S. equity market following last week's explosive rally, and some options mavens are urging clients to stock up on portfolio protection while it's cheap. Meanwhile, the Cboe Volatility Index (.VIX), known as Wall Street's fear gauge, has tumbled to its lowest level in seven weeks. They recommended taking advantage of the drop in volatility to deploy stock replacement trades, which involve swapping long stock positions for cheap call options that would reap gains if the market continued to rally. Investors' equity positioning fell to a five-month low before last week's rally, Deutsche Bank data showed. With investors less exposed to stocks, "they don't necessarily need to be rushing to get hedges now," Murphy said.

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Persons: Matthew Tym, Cantor Fitzgerald, Cantor's Tym, Chris Murphy, Murphy, Saqib Iqbal Ahmed, Ira Iosebashvili, Andrea Ricci Organizations: Federal, Reuters Graphics, Barclays, Treasury, Susquehanna Financial Group, Deutsche Bank, Thomson Locations: U.S, Santa