9/11 conspiracies and "put" options?

I've been trying to follow the 9/11 conspiracy theorists insisting that a large number of "put" options on the airline industry shortly before the 9/11 attack indicates foreknowledge of a conspiracy. I want to make sure I understand what they're saying before deciding whether they have a legitimate claim or whether they're a bunch of crackpots. Just HOW would any put option work in this supposed conspiracy? I know a "put" option is a contract to buy a stock at a given fixed price between one side who believes the stock price will go up and another side who thinks it will go down, but I can't for the life of me see how it can be a factor in these 9/11 conspiracies.

Let's say secret agent X wants to make a quick buck off a 9/11 attack he knows is coming, so he place a put option to buy stock at, say, $40 per share. Secret agent X then stages the 9/11 attack and the airline stock drops to $30 a share, meaning that when he invokes his put option, secret agent X will be paying $40 for a $30 stock. Secret agent X is *losing* $10 per share. Who in his right mind would stage a conspiracy to lose money?

The only way I can see how this would work is if some other unknown buyer had a put option with secret agent X, rather than the airline industry. The put option with secret agent X is for $40 per share, and then secret agent X stages the 9/11 attack and the stock drops to $30 per share. Secret agent X can now buy stock from the stock market at $30 per share and force the other buyer to pay $40 per share for a $10 profit...but this is completely different from their "put options on the airline industry" claim and it would means someone out there was ripped off by secret agent X and I can't say they'd remain quiet about it. The only other way would be for the airline industry to write a put option for someone else and stage the attack on themselves, but staging an attack that creates a long term loss for the benefit of a short term gain is just plain absurd on so many levels.

Either these conspiracy theorists are entirely clueless on how put options work, or I'm entirely clueless on how put options work. So, I'll let you settle it: how DO put options work?