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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: sleepydragon   😊 😞
Number: of 15061 
Subject: Re: Crazy idea: leverage up to buy put protection
Date: 02/27/2025 11:39 PM
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I have another idea.
Suppose you are like me, who’s already 75% net-worth invested in brk.
One could sell 100 shares of Brk atm put with strike $500 and 1 year expiration, and pocket about $2000-2500 put premium. At the same time you put $50000k in Tbills earning 4%.
One year later, if Brk is higher than current price. You have earned 8% (2000+ 2000/50k). If Brk is lower, you will spend the 50k to buy Brk stocks. HOWEVER, you can sell these stocks immediately if you want - you will lose some money but since you already have a huge BrK existing holdings that has already appreciated a lot, it’s probably not a big deal to feel bad about. You can also keep the stock of course.

It could also be better to sell the two years put.

What u guys think?
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