would it be good idea to short the stock though?
"The market can stay irrational longer than you can stay solvent."
- A. Gary Shilling (https://quoteinvestigator.com/2011/08/09/remain-solvent/).
Simple example is that i can buy a put option in some company. If the stock price falls below that point, I buy shares and sell them to the option writer and make a profit. My maximum loss is limited to the amount I spent on the option.
Likewise the put seller has not taken unlimited risk - their risk is limited to the cost of the shares they’ve offered to buy at.