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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. 

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.