Three thousand dollars will get you options until 2020 that you can cash in for $50k worth. You don't need a ton of cash if you think they're going to zero.
Bounded upside, infinite downside. I'm sure it's more complicated but what am I missing?
In this case, the parent would buy a put option, which would pay out only if, and proportionally to the amount that, the stock is lower than some predefined price (usually the present price with a small delta).