pre open trades, page-11

re: pre open trades sharle if youbuy a $2 Hardman PUT option, you are buying the right to sell Hardman at $2 to the person who sold the option.

Why would someone sell a $2 PUT option? Lets say the share price is $2.25. The seller of the PUT thinks it is "safe" to sell a $2 PUT - and maybe pockets a 10c premium. If the price stays above $2 - the seller is home free. If the price falls below $2, the seller is in sh*t!

Note - don't confuse PUT options with CALL options - they are different.