Hedge Funds- hedging techniques

In book 4, page 602, " In a down market a put option would provide less protection than outright short positions; a deep out-of-the-money put has little protection." Can somebody please explain why a put option provides less protection in a down market? Wouldn’t the put be more valuable since the stocks would be lower than the put exercise price? Here we are buying the put option. Thank you.

The key is “deep out-of-the-money”…i.e. the price has a long way to travel before it becomes valuable to you.

Thank you.

Also, maybe, in a down market, puts are more expensive so you get less bang for your buck?

If you short a stock, you participate fully in the down movement immediately and fully. if you buy a deep out of the money put, the delta is very small and the option will hardly move for every dollar the stock drops. If the stock drops $10, you will gain more being short the stock than buying a deep out of the money put, which may have only gained $1 or $2 per contact, vs the short which made $10.

guys, would it not be the same if i’m 100 long put (delta = -0.5) or 500 long put (delta = -0.1) ???