Shorting stocks is very difficult to get right, and most of the reason why is that the timing window on shorts is very narrow. Stocks go down much, much faster than they go up, and when it has already started to go down, you're too late most of the time.

I find it much more profitable for my situation to short using options strategies, which I can "repair" as the market conditions play out while I'm waiting for the downward moves. It doesn't gain as much straight profit as a straight short, but there are several advantages:

- I don't have to pay the dividend on a stock that I'm shorting with options. If I directly short a stock that pays dividends, then when the dividends are paid by the stock I'm shorting, I have to pay that dividend to the stockholder from whom I borrowed the stock. This happens all automatically by your broker - you just see that every quarter, you're charged the dividend if you stay short that long.

- I can use options to play both moves up and moves down, and lift/exercise one side of the put/call strategy at a time, or I can reduce or increase my options positions on one side of the play as conditions develop.

- With the correct option strategy, I could capture more than 100% of the downward move if I want to set up the option strategy that way.

Likewise, I can use options to capture some of the volatility from a huge downwards move on an optioned stock after it has happened. I could write puts under the lowest stock price, and if the stock doesn't go lower, I get to keep the option premium after it has decayed.

I'm a huge advocate that people learn how to use options. I think they're an under-utilized tool that individual investors could use if they learn how to use options in a smart manner.