If it was a major stock that I thought was going down the tubes (Worldcom for example), then I'd probably purchase some puts on the stock and save myself the possibility of it shooting back up. People who short stocks in the pennies -- that's a little risky for me. I think options give you a lot of power to take on high-reward trades with capped risks (if you are buying the options). I've done options in the past -- regardless of what the Motley Fool Investors book says, strategic option plays are a great way to diversify your strategy.