Here is a summary of what the watchmaker can do if he buys call options as soon he tenders a firm offer:
RECEIVES ORDER ORDER IS CANCELLED Gold prices Makes no use of option, Makes no use of option; DECLINE below buys at market price. may resell option. $400/oz
Gold prices Uses option to buy gold Makes use of option and RISE above at $400/oz. resells gold at profit $400/oz or resells options.