Hey guys, Just a quick question from a non-options trader. I'm reading a book in which the author describes how a number of firms directly exposed to a particular firm buys puts well below today's market price to hedge against the event of the firm going bankrupt. I can't figure out why they'd do this. If in fact the price of the underlying firm's stock drops sharply, wouldn't they be better off just buying puts at around the current market price of the stock? Wouldn't they have made more money that way, even at the higher premium? Am I missing something crucial concerning options theory?