I am not criticizing experts who’ve called for the death of Pandora Media Inc (NYSE:P), but I m betting against them this morning.

I present the argument that despite of running in the red and having giants like Apple Inc. (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) competing with it, the darn thing should be gone already. Yet it’s not, and I want to bet on this little guy … cautiously.

Much like the chatter that lingers around Twitter Inc (NYSE:TWTR), the lingering rumors of a buyout keep a floor under the stock. I want to sell premium for income below said floor. There are several prospective buyers, so it’s not like I would be hanging my hat on one deal. The early negative price action this morning would have made for elevated put premiums, so to benefit put sellers like me.

Click to Enlarge I acknowledge that, technically, Pandora stock is challenged. I believe that prices usually revert to the mean then overshoot in either direction. So in today’s bullish setup, I have to make room for more potential downside.

Since Pandora’s fundamentals are indefensible, I will merely stick to the technicals in choosing the levels where I want to place my bet. Yes, it is a bet, which makes it a speculative trade in a conservative portfolio.

Is this the time where P finally dies? I doubt it. Again, much like TWTR, someone will take it over and make it work for them. The lower price goes, the easier that becomes. So I want to bet that the lows in Pandora stock will hold once more.

The Bet: Sell the Dec $7 put and collect 50 cents per contract. Here my theoretical odds of winning are close to a coin flip. Usually I prefer something closer to 85%, but here it’s okay since this is a speculative trade. If Pandora’s stock price stays above my strike then I retain maximum profit. Otherwise, I will own the shares and suffer losses below $6.50.

Although, this is not as big a deal in a low-priced ticker, selling naked puts still opens large risk. To mitigate it, I can sell spreads instead. This way I limit the downside exposure by buying an equal number of puts below those that I sell.

The Alternate Bet: Sell the $7/$6 credit put spread, where I have about the same theoretical odds of winning, but with much lower risk yet still yield 25%.

Compare this with needing to buy Pandora stock now and hope it rallies. This setup leaves room for error, so I can still win even if P stock falls through my strike.

But keep in mind: Trading options is risky, so never bet more than you can afford to lose.

Learn how to generate income from options here. Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @racernic and stocktwits at @racernic.