Creating a Synthetic Short Position Using Options

Stacey Briere in this weekend's Barron's wrote an article Hard-to-Borrow Stocks May Offer Easy Discounts (subscription required) where she discussed how to create a synthetic short position by purchasing a put and selling a call at the same strike price. Creating a synthetic short position using options is especially helpful when the outstanding short position is already substantial. However, crowded shorts often make very poor candidates for shorting because of the potential short squeeze. So be careful.

While I certainly understand the synthetic short position described by Briere, I might simply purchase a deep-in-the-money put to achieve the same effect. A deep in the money put is effectively a short position. As the stock goes down, the put position increases in value. As the stock rises, the put position looses value.

I am going to ask Adam Warner at Daily Options Report (one of my Favorite Financial Websites) to comment on the two different methods of creating a synthetic short. Which method is better and why? When would one method be preferable over the other? I look forward to his comments.

Update

You can read Adam's response at Buying Deep Puts vs. Synthetic Stock Shorting.