"The simplest being to short a basket of stocks that are going to be affected and cover the shorts with buy orders." Don't even worry about the basket thing. Y

"The simplest being to short a basket of stocks that are going to be affected and cover the shorts with buy orders." Don't even worry about the basket thing. You would just use SPY (S&P 500 ETF) or ES (e-mini S&P futures). If you can predict how far it will drop ahead of time (a big if) then the strategy is, as you have said, to leave resting buy orders at the bottom of the dip. You don't need to short though, you could just unwind when the position when market bounces back.