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Writing put options can be like selling insurance. Mitt Romney is giving us reason to believe coal stocks like Arch Coal (ACI), Peabody Energy (BTU), Alpha Natural Resources (ANR), Cloud Peak Energy (CLD), and James River Coal Company (JRCC) will not sell off in the near term. That is an opportunity to earn an insurance premium.

Like an insurance company, we are on the hook if disaster strikes, so selling puts carries the same risks of owning common stock. But if disaster does not strike, the insurance goes unused and the insurance company earns their profit.

Source: Put Writing: Make Money With Coal 'Insurance' (Video)