Can a Pool Operator Use Options Contracts to Hedge the Risk of Fluctuating Block Rewards?

Yes, a pool operator can use options contracts to hedge the risk of fluctuating block rewards, which are paid in the mined cryptocurrency. Specifically, they could buy a put option on the cryptocurrency.

This gives them the right, but not the obligation, to sell their future block rewards at a predetermined strike price, thus setting a floor for their revenue and protecting against a significant price drop.