While I believe that most people are good folks, as a country, we delight in the misery of others. Celebrity downfall, political scandals and gruesome criminal cases and the like titillate many people to no end. Despite that, I find that it's incredibly hard for investors to wrap their heads around making profits from the downfall of companies, especially the ailing financials.

We're taught that you can't make money on a slumping stock, but that's simply not true. Trust when I tell you that, after acquiring 11 triple-digit winners from the financials this year (and that's just the financial sector), there's money to be made in the money lenders, brokers and their cousins.

With the number of U.S. banks that Federal Deposit Insurance Corp. (FDIC) has had to rescue this year now in the double digits, many banks are free-falling.

While the failures are certainly troubling for both long investors and customers, short sellers, as well as options traders of all experience levels, who were playing the short side of these banks couldn't have been happier. (In a related note, if you're concerned about the safety of your money, click here to read an article my OptionsZone.com colleague, Chris Rowe, penned about how to protect your bank deposits in case your bank should close.)

If you're new to the whole idea of shorting stocks, the basic tenet is, quite simply, that you profit when a company's stock value and/or fundamentals deteriorate. It sounds counterintuitive, but like any strategy you need certain tools for success.

You don't magically buy the stock and get money when it goes down. There are a myriad of ways to short a stock, including the most egregious and risky, which is borrowing stock to sell and then hoping against hope you can buy it back at a lower price for a profit.

I personally like to sleep at night so I don't go that route. The method of capturing short-side profits that I recommend is by using put options that are as easy to buy as any stock. If you've never used put options before, don't panic. This is easy, trust me. Investors have been trading options for nearly 40 years–that's more than double the amount of time Exchange-Traded Funds (ETFs) have been around.

A put option is simply a fairly inexpensive security that gives you the right–but never the obligation–to sell a stock at set price. I can easily illustrate how put options and work and why you can make boatloads of dough with them. Let's use a prominent name from among the financials, Citigroup, as an example.

Let's say that last year, you bought long-term Citigroup puts that gave you the right to sell Citigroup for $45. Well, last year, that wouldn't have been a big deal because Citi was trading above $45. They would have essentially been worthless.

But let's say you held onto those Citi $45 puts into this year. With Citigroup (C) now trading around $20, your puts would allow you to...