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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch 🐝🐝🐝 GOLD
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Number: of 21938 
Subject: Re: Check Capital Management BRK Options Stragegies
Date: 10/20/23 5:01 PM
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I'm curious, if you were short brk, are you saying you sold more calls than you had shares to back? Or were the calls sold against long dated calls you are holding that may require a broker to view it differently due to the mismatch of expiration timing? Or is it something completely different I'm not even considering?

No, I didn't sell more calls than I have BRK positions...that would leave me net short. That would be a pretty risky proposition for such a fine firm, though I might consider it at over 2x book : )

The call position isn't really specifically tied to any long position in any firm sense.
But, I have calls and stock and cash. Since I'm long one way or another more than the calls I wrote, it's in effect a covered call.

What I meant about interest was this:
The call raised cash, which is sitting in my account and shows up as part of the balance.
But I don't believe the cash raised by selling that call counts towards the fraction of my cash pile that is earning interest.
And (I'm embarrassed to admit I don't really know), I think a bit MORE of my cash also does not earn interest while I'm short the call, being a portion that is working as margin security for the potential increase in the liability created by the short position.

Jim
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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