Right now the stock is around the 320s area. I don't want to short the stock outright. I was thinking of buying the April 10 puts. This gives me a BE of around $8. I would appreciate some input on perhaps a better way to structure this. Thanks!
Presuming you're solidly bearish this stock priced eerily similar to GME. You can take a lower risk model and structure an out of the money put fly with defined risk. If you peg the range with a shorter time window that april the payoffs can be pretty good. Pros and cons to this trade. Can also do a put spread as if the vol is bid up these trade cheaper than normal. Really depends on how certain you are of the price and time as to what structure to pick. I just always hate buying options straight out as theta kills you. Just a bias.
Please caroy, can you envision a situation when buying outright puts/call would be the most viable strategy against all other combinations? I'll appreciate it, thanks.
It would help if your "this" were more well defined! You say you wish to short, but also say you do not wish to short the stock outright. When trading with options, you add two additional variables that must be considered: (1) Time & (2) IV. If you know how long you will hold the position, you can address the time (know which Expirations are more viable). For IV, if you know what will happen to IV from entry to when you exit, you can structure the trade to fit your expected movement. However, if you have no confidence on what will occur with the IV, but have your timeframe nailed down, you may wish to compensate for IV, by a synthetic short, but use a short vertical for the call side (instead of a naked Call) to limit the risk. The width of that vertical should be subject to your expectations and reservations of the trade. {eg. Buy PUT, sell same strike Call, such that cost of position is near zero (offsetting IV premium, will be near ATM strike), then add long CALL to contain risk} The return possible with the synthetic can be similar to that of a short of the underlying.