You can sell a put at a strike price you believe is reasonable and collect the premium for guaranteed. If the strike is hit, you've bought in at what you belie

You can sell a put at a strike price you believe is reasonable and collect the premium for guaranteed. If the strike is hit, you've bought in at what you believed was a reasonable price at the time of your contract creation. You may technically show a "loss," but you're getting something you wanted at the price you wanted. If you buy a put instead you're effectively saying you strongly believe that the stock will fall to $x, and in this case, the fall to x will generate more money than the cost of the premium. The second scenario is hard to get right because the option already has the statistical behavior of the stock priced into the premium. Your knowledge needs to be better than the collective knowledge of the market to make this viable