No. of Recommendations: 1
Not always, but mostly. I still have puts with strikes $390-410 I bought in the first half of last year when from around $400 Berkshire did shoot up to $440-450, convinced it won't remain at that relatively(!) high valuation forever. As it did not but went even higher and higher those puts are near worthless currently.
I don't quite understand this. If you bought the puts between 440-450, there were multiple opportunities after that where the stock was lower. Even a month ago, it was close to 440 again (maybe could have rolled them?). But in 2024, it was briefly below 415 sometime in July/August.
In general, I prefer to sell options rather than buy them. That way I benefit from the decay of time value rather than losing from the decay of time value. You can use the same strategy as you described earlier, but instead of buying puts when you think the price is high, you sell calls. And likewise, instead of buying calls when you think the price is too low, you sell puts.
