NOV 2007 is 224.60
As of yesterday, the pricing for NOV 2011 was 187.00
This is the price today for NOV 2011 Option.
To make money the price of that option has to go up or down. For example, the price today for Nov 2011 is 187. Suppose the news gets worse and the market anticipates more down side and in a few months that NOV 2011 price goes down to 160. If you shorted this, you could get out and make money.
The problem with these is that the market is anticipating the 16% decline. You can only make money or hedge if the results are considerably better or worse than this market anticipates.
The best time to make those kinds of plays are at market inflection points (turn-around in conditions). We had a clearyl defined inflection starting about 2005. If one had been able to short the housing futures at that point one could have made some dough.
In my opinion the next opportunities will be when the market anticipates a rebound that does not happen.
