The problem with shorts and puts is that they can rally and turn on you.
“The latest rally in GM from roughly $18 to $29+ is explainable as well. There were simply too many people betting too heavily against GM (via put options expiring in 2007), and now they are taking those bets off realizing they were wrong. Unwinding of massive numbers of GM puts creates an underlying bid and GM rallied.” From Mish’s Blog
