What do you guys think about doing a naked short on an investment bank's 2009 out of money put? The reasoning is that by 2009 the financials should recovered and be higher than current price which most agree is near the bottom. For example lehman (currently at $60) has a JAN 2009 put (VHEMJ) at $5.30 If i short 100 contracts, that's $53k cash and i start to lose money when the price is below $44.7 on expiration. Margin requirement for this trade is $50k. Is this something that's considered taboo in the option world? I mean it sure beats the weekly (or monthly) grind of buying/selling and risking your money. This way i make 1 bet, spends less time researching, and also lower risk i think. Since i am betting a $60 stock which is near the bottom will be higher than $45 a year from now verus if you do monthly trades. any thoughts?