In the increasingly abstract world of Wall Street, where investing in stocks and bonds has given way to trading pools of mortgages, corn not yet grown and imaginary baskets of stocks, Harry S. Fluke of Alexandria learned to make money by selling promises he didn't want to keep.

Harry's specialty was promising to buy things tomorrow for less than they are worth today. People would pay him for his promises, but they rarely demanded he keep them because prices were always going up.

When the stock market suddenly stopped soaring two months ago, Fluke's once-worthless promises rapidly multiplied in value. In one week they wiped out the savings of a lifetime. In one day, they transformed Harry Fluke from a prosperous retiree into a bankrupt victim of Black Monday, leaving him half a million dollars in the hole.

He was not the only one.

Thousands of investors have complained to state regulators through the North American Securities Administrators Association that they lost money in the same way -- trading promises in an esoteric stock options strategy called "writing naked puts."

Naked puts caused hundreds of millions of losses at the Chicago Board Options Exchange when stocks collapsed on Oct. 19. One professional options trader in Chicago lost $52 million in a single day. A Northern Virginia brokerage firm went broke because of losses by customers in similar deals. The clients of a group of Washington investment funds lost more than $1 million when an options trading system that was supposed to protect against a crash as bad as 1929 proved inadequate for the crash of '87. Puts were "the black hole of Black Monday," the Wall Street Journal proclaimed.

What is different about Harry is that his misfortune is a matter of public record. His broker, Thomson McKinnon Securities Inc., has sued him for $318,000. Another brokerage, Dean Witter Reynolds Inc., says he owes them $195,000, according to court records. The brokers are going to be stuck for much of the half-million-dollar debt, because Fluke doesn't have it. Fluke has filed for bankruptcy. About all that he has left is a $113,000 house with a mortgage and a pair of eight-year-old cars. The law won't let them take his house and repossessing a '79 Volare won't make much of a dent in a debt of $523,514.36.

Harry Fluke does not like being a case study. "The stock market crash just killed me," he said before terminating a terse phone call. "My life savings have been wiped out. What more is there to say?"

Fluke's case shows not only how one small investor got wiped out in the crash, but also how sophisticated and treacherous personal investing has become. It raises questions about why stockbrokers with a responsibility to serve and protect their clients allowed a retired civil servant to not merely risk, but to lose his life savings. At the heart of Harry Fluke's tragedy is the issue of whether the stock index options he was trading are good or bad for the country, whether we -- as well as Harry -- would be better off without naked puts on stock indexes.

Stock index options and their close relatives, stock index futures contracts, have been blamed for making the stock market more volatile, causing prices to jump around unpredictably, perhaps making the Oct. 19 collapse worse than it might have been.

A half-dozen commissions and committees are looking into the causes of Black Monday and its effects, including the impact of stock index futures and options. Most of those inquiries focus on the macroeconomic impact of stock index trading, the way the stock market and the nation's economy have been changed since stock index investments were invented five years ago.

At the opposite end of the issue is the effect of stock index trading on small investors like Harry Fluke.

Bob Sampson, manager of the Thomson McKinnon office where Fluke had his account, wouldn't talk about the case. In its lawsuit, Thomson McKinnon accuses Fluke of fraud, saying he had more than 10 years experience as an options trader, had made money on the majority of his options investments for the past four years and deceived the broker about his ability to take such a big risk.

"The brokers, when things were going well, were reaping enormous profit from me. Now they accuse me of fraud and deceit," said Fluke. "I lost my life savings. Nobody every really sat down with me and said, 'This is far more risk than you can afford.'"

Fluke's complaint raises questions about whether his brokers violated the first federal commandment for stockbrokers: the "know your customer" rule. The Securities and Exchange Commission requires registered brokers to recommend investments that are "suitable" for their customers, given the clients' finances and the risks involved.

On paper, the risk Fluke took is stunning. For the chance to make a profit of a few hundred dollars, he sold options that in the end produced losses of almost $12,000 each. The leverage was something like 20 to 1, and Fluke was on the short end of the stick. Yet for years, as the stock market climbed, he apparently made money betting it would not fall.

The stock index options that Harry Fluke was trading are a third-level abstraction, two steps removed from the reality of buying and selling stocks. He was not trading stocks; he was trading promises. He was not even trading promises to buy stocks, but rather promises to buy imaginary baskets of stocks, represented by a single number in the newspaper stock tables, the Standard & Poor's 100 stock index.

Under the government-sanctioned rules of the game, Fluke not only didn't have to buy the shares he promised to buy, he was specifically prohibited from doing so, required to settle his winnings and losings in cash.

The options he was selling were called puts, because they were promises to buy -- to let someone put it to him. They were "naked puts" because the promises were not backed up by stocks or anything else; he was exposed to the risk that what he had promised to buy would be worth less than he offered. They were "out-of-the-money naked puts" because they were promises to buy at well below the going price.

Selling out-of-the-money naked puts is a lot like betting that it won't snow on the Fourth of July.

Everybody knows it's not likely to snow on the Fourth of July, so not many people will want to bet against you.

But if the payoff is big enough -- or the bet small enough -- people will take a chance on a long shot, as millions of lottery players do every day.

And there are some people who would lose a bundle if it did snow on July 4. For resort real estate agents, corn and strawberry farmers and lemonade stand owners, betting on summer snow could be a valuable insurance policy.

As the stock market bulled upward over the past few years, betting that it would not plunge -- or that it would not snow on the Fourth of July -- turned out to be a pretty good way to make money. You could earn a few hundred bucks apiece selling puts on the S&P 100 Index that would be worth money only if the market turned down.

Then on October 19, it snowed on the Fourth of July.

It didn't just snow; there was a blizzard the likes of which Wall Street had never seen. An avalanche of sell orders buried the stock market and proved just how dangerous it was to go naked in the options market.

Because of the way writing stock options works, those who bet that it would not snow had to pay inch by inch as the deluge mounted, making good on the losses as the options they sold became more and more valuable.

The seller of a put promises to buy stock at a set price regardless of what happens in the stock market. If the put promises to buy stock for $100 a share and the price of the stock is more than that, the seller won't have to make good and makes a profit on the deal. But if the stock plunges to $75, the seller of $100 puts is out $25 a share. And each put is for 100 shares. Fluke held puts that were worth less than $500 at the beginning of October but were valued at $11,800 by the end of Black Monday, a loss of $8,500 in one day.

People who had bought puts made a bundle -- at the expense of Harry Fluke and others who had sold them. The public records don't show how much Fluke collected when he sold his options, but brokers estimate it was between $100 and $500 each. He sold 72 in all through Thomson McKinnon and more through an account at a Northern Virginia office of Dean Witter Reynolds.

Dean Witter officials decline to discuss his account. The firm has not sued, but has a claim against Fluke in bankruptcy court for almost $200,000.

When the stock market opened the morning of Oct. 19, Harry S. Fluke still had about $54,000 in his account at Thomson McKinnon, but his options-selling strategy was in big trouble. On one batch of 12 options, he was losing $3,350 apiece; another group of 30 was down $2,900 each.

Just before 11 a.m., Fluke called his broker and tried to buy his way out of his promises.

He offered to pay $4,700 apiece to buy back the group of 30 options, and $5,300 each to get out of the other dozen. But it was too late; nobody would take those bids. Options prices were skyrocketing.

Options markets losers have complained that prices became unreasonably high during the day on Black Monday, that professional options traders at the Chicago Board Options Exchange were gouging individual investors.

Exchange officials dispute that. With the stock market in free-fall, the risk of buying was too great and traders had to demand steep premiums to protect themselves from disaster. "It's like walking into a burning house and trying to buy fire insurance. Of course it costs a lot," said a CBOE spokesman.

Soon after lunch on Black Monday, the manager of the Alexandria branch of Thomson McKinnon was on the phone to Fluke, telling him his $54,000 had been wiped out and he had to come up with another $250,000 immediately. In the dry language of the lawsuit filed against the hapless options writer, "defendant represented to the branch manager that he could not meet the margin call."

A few minutes later the branch manager called back. If you don't come up with a quarter of a million dollars immediately, we'll have to sell out your account at any price. "Defendant advised the Branch Manager to close out defendant's account," the lawsuit noted.

The public records do not make clear exactly how Fluke lost on each of his options positions, but the total is there: a deficit at sundown on Black Monday of $318,500. HOW 'NAKED PUTS' WORK

A high-risk investment strategy known as "writing naked puts" proved to be a disaster for thousands of investors when the market crashed in October.

Betting the market wouldn't drop, the investors had sold promises to buy shares at today's prices anytime in the next few weeks, even if stocks plunged. Investors collected a fee of a few hundred dollars for these promises, called put options. The puts are referred to as "naked" because the sellers had no offsetting investments to protect them from losses and were exposed to any decline in the stock market.

As long as the market kept climbing, no one demanded the sellers of naked puts make good on the promises, the options expired worthless and the sellers kept the fees they had collected.

But early in October, the options became increasingly valuable as the stock market began to turn down. The upper line on the graph at right shows the Standard & Poor's 100 Stock Index, an imaginary basket of shares, and the lower line tracks the growing losses faced by investors who sold naked puts.

Around Oct. 1, when the S&P 100 index was about 320, a put to sell the index for 305 was trading in the 3-to-5 range -- $300 to $500 for a standard option on 100 shares. By Black Monday, two weeks later, the S&P 305 put was worth $11,800, and investors who sold them for $300 to $500 had to make up the difference.