In option trading, what does this mean: 2 Jan 2010 300 puts to open?

Bf says: Ssomeone agreed to buy 30,000 shares (100 shares per put, 300×100) on Jan 2.

It could mean a couple of things, depending on the exact context. With options trading, you need a date of expiration—ie, the date the option disappears on.

An option is the right to purchase (call) or sell (put) a certain amount of shares by a specific date and at a specific price.

You are talking about puts (the right to sell). Each option is worth 100 shares of the stock. So let us take this example in bits:

2. The number of options up for discussion, ie 200 shares of stock in total.
Jan 2010. The options expired in Janurary.
300. The price at which you could buy or sell the stock.
Puts. Defining it as your right to sell.

Ergo, 2 Jan 2010 300 puts is the right to sell 200 shares of Apple stock at $300 a share by January expiration.

“to open” usually refers to the price of the options (options are priced differently than the actual stock—the price is usually based in the difference between where the stock is now and where the market expects it to be by expiration with some time value of money thrown int).

I’m not really sure why you would ask about expired options (as Jan 2010 options absolutely would be, expiration Friday is the third Friday of the month and that was several months ago) as they are worthless. You either exercise your options or you do not and they (more or less) disappear.

So given that you are not talking about expired options it could mean that on Jan 2, 2010 you purchased 300 puts at whatever the opening price was that day. But that doesn’t give the price on the puts or the expiration, so writing it that was would be incredibly useless. My first explanation is far more likely, though expired.

I had an answer started, but I see that it’s already been thoroughly and clearly answered.

A ‘put’ option is generally written by someone who wants to buy stock at a known price in the future. In this case, the ‘put writer’ (the person who originated the options contract) decided that he could take the risk of purchasing Apple at $300 per share on or before the third Friday in January 2010—or—he was pretty sure that Apple would never get to that price, and wrote the put option as a way to generate some (speculative) income.

The person who would be expected to purchase the put option, however, generally is one who has the 200 shares of Apple stock that he would like to be able to sell for $300 per share… provided that the stock hasn’t reached that point by the third Friday in January 2010.

But those are the ‘expected’ sellers and buyers of those options.

There’s also a secondary market in options, of pure speculators banking (or betting, if you will) on the direction that Apple stock will take, and whether the option becomes more or less valuable before it expires on the certain date.

To put some actual numbers to this, in the past 2 years Apple stock has traded from a low of $78 to a (current) high of $226 (in round numbers). Anyone who would be writing a “January 300 Put” (sometime last year, since most options contracts are relatively short-lived, although there are specific long-term options available, and clearly titled as such) would have put a huge premium on this options contract, since it was so far “out of the money” for all of 2009.

That is, at Apple’s high in 2009 of around $206 or so, the option would have been at least $94 “out of the money” (meaning a person agreeing to buy your Apple stock at $300 would have been paying almost $100 per share more than it was worth. So that would have been a very expensive option to purchase, and would have been a good income vehicle for the person selling that put.

This actually does make sense to people who have done it, but looking at it in the context of an answer box on Fluther, even I find myself going “WTF?” a little bit.

Very good answers above. I can expound on one thing. “To open” means that the position is being created, ie: purchased. Alternatively, the position could be closed, or sold, before the expiration date. Of course, to close the position, the trader must already own, or hold, the put contracts.

@UScitizen what would a put “write” be, then?

If I were to write a put, I would be creating (and selling) the contract. If you bought this put from me, you would then have the option to “put” (force a sale to me) the underlying equity on me at the strike price. Of course you would have to execute this option prior to expiration date.