First the legal stuff: If this post is ever used in an
SEC investigation, I, as writer of this post have no personal knowledge of the thread starter or the company involved. I offer a strategy based on a hypothetical presented in the first post.
No, I kid. Or do I?
Sounds fishy to me. But if your premise is true, why not just sell the stock short? With options there would be the issue of time decay and Volatility. I am not an options guy, so I could be wrong here. But in a sure thing situation that you present I would think the most bang for your buck is to just sell at the current market price and watch the price go down 3 dollars. Along the ride down, add to the position. Normally, I would not recommend adding on by more than the original buy, but rather reverse pyramiding- adding on be less and less each time you add on. Yet, since this is such a SURE THING (unlike everything else in the market
) just keep adding on by as much as you can.