Option Strategy to short
I have a strategy to short a stock, but I want to utilize options for this strategy instead of just selling short.
My issue is that I don't know much about options other than buying calls/puts.
The issue I am facing is strike price/duration of time.
The stock may fluctuate up/down after my signal shows - so I want to make sure that I don't pick the wrong strike/expiration - Is there any way around this? Would I just buy LEAP puts at the money?
The only way to answer this question is by determining your risk and reward profile for this particular option, since that is how they are priced. If you're willing to take on some risk in order to pay a lower premium, buy a put that is out of the money. If you want to play it safe, buy one that is in the money, but realize that you will pay a higher premium due to the higher possibility of you exercising the option.
It's not that much different than deciding between a blue chip dividend aristocrat or a lower priced non-dividend paying tech stock like Blackberry.