Shorting Lehman Brothers & 2008 Crash
Buy deep out-of-the-money put options on Lehman Brothers (LEH) and Bear Stearns.
Preparation
In early 2008, secure an international brokerage account (like Interactive Brokers) with advanced options trading approval.
Execution Steps
Forget about complex Credit Default Swaps (CDS) which are inaccessible to retail. Instead, heavily buy Put Options on heavily exposed financial institutions. Prime targets: Lehman Brothers (LEH), Washington Mutual, AIG. Buy deep out-of-the-money puts expiring in late 2008. When Lehman files for Chapter 11 bankruptcy on September 15, 2008, its stock plummets to near zero. The value of your put options will skyrocket by thousands of percent.
Exit Strategy
Sell the options to close your positions amidst the absolute panic in mid-September. Do not hold until expiration to avoid liquidity traps or settlement issues. Park your massive cash profits in a "too-big-to-fail" bank (like JPMorgan Chase) and prepare for the 2009 S&P 500 bottom-fishing strategy.