will we return to the good old days, page-17

No worries.

Option pricing is a black art. There are two components to the option price, the intrinsic value (heads price minus strike value, currently zero) and the potential value.
The intrinsic value reflects the value of an 'in the money' option if it was exercised immediately and converted into a share. If the heads are up to 4.5c, then we have intrinsic value of 0.5c on the options. But, if there is potential for them to go deep into the money, then speculative traders will look for the leverage options provide. A 5c target on the heads will see the options 10 bag (from .001), but the heads just 2-3 times current price. The downside risk, is, of course, much greater. You could lose all your option investment if the heads only make it to 3.5c by Nov, but would still have a healthy return on an investment in the heads.

Option pricing is anything but a linear relationship to the heads as your post suggests, but in this case given the big relative jumps between .001, .002 and .003 it might be close.

Buying options at .002 right now would be a much scarier proposition!