Best option position for downside bias

Quote from TskTsk:

I have a stock I know 99% will go down, what is the best way to absolutely maximize the return on margin / minimizing risk via options? Selling ATM calls? Synthetic short? I need some ideas...thanks guys
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As others pointed out: some important parameters like timeframe etc. is missing.
For a timeframe of 2..8 weeks use this:
Just buy OTM plain vanilla put options (t=30..60 days)
And since you are sure it has to fall, then buy even more should it unexpectedly rise and your position lose more than 50%.
Just repeat it until you succeed. Ie. do the math to be able to repeat this averaging down strategy 3 or 4 times.
If still no success then your "99% certainty" wasn't correct...

Quote from oldtime:
It's always that damn 1% that gets you
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:-) true
 
Quote from mutluit:

Just buy OTM plain vanilla put options.
And since you are sure it has to fall, then buy even more should it unexpectedly rise and your position lose more than 50%.
Just repeat it until you succeed. Ie. do the math to be able to repeat this averaging down strategy 3 or 4 times. If still no
success then your "99% certainty" wasn't correct...
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It's always that damn 1% that gets you
 
Quote from cdcaveman:

I hate generalizing about strats on a ghost ticker...... what's the ticker..... dont think naming it on et is gonna blow the trade
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I assume he thinks he is getting inside info from a friend of a friend, who knows a friend.
Hence the super secrecy and 99% certainty.
Hope he is right, because I have a feeling he is betting the farm on it.
 
Here are some candidates for buying OTM/ATM puts of the following
underlyings for a timeframe of 1..8 weeks (or shorting the underlying):

RCL BAC SIRI DB IP MSFT SI PRU BX YHOO SAP CHK BCS SAN PAAS C GOLD HL PAG JPM HBC PHG CCE

I use 2M options, shorter is ok too, but is riskier / more "volatile".

My advice: it's better to buy the puts only after an up day of the underlying--> reduces risk
 
Quote from mutluit:

Here are some candidates for buying OTM/ATM puts of the following
underlyings for a timeframe of 1..8 weeks (or shorting the underlying):

RCL BAC SIRI DB IP MSFT SI PRU BX YHOO SAP CHK BCS SAN PAAS C GOLD HL PAG JPM HBC PHG CCE

I use 2M options, shorter is ok too, but is riskier / more "volatile".

My advice: it's better to buy the puts only after an up day of the underlying--> reduces risk
More...

What are your parameters that came up with those tickers. Lotta financials.... do you include vol in your considerations....
 
Quote from mutluit:

Here are some candidates for buying OTM/ATM puts of the following
underlyings for a timeframe of 1..8 weeks (or shorting the underlying):

RCL BAC SIRI DB IP MSFT SI PRU BX YHOO SAP CHK BCS SAN PAAS C GOLD HL PAG JPM HBC PHG CCE

I use 2M options, shorter is ok too, but is riskier / more "volatile".

My advice: it's better to buy the puts only after an up day of the underlying--> reduces risk
More...
it actually aint that bad of a strategy

just buy puts on anything everybody is talking about

especially after an up day

like the man said, "The most you can lose is all you invest."

(gotta watch out though for those sneaky put sellers who run the actuarial tables on you.)
 
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