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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", sykesix asked the members: "What do you do if you arrive early at movie besides go to the snack bar?" 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 ✹✺🐝🐝🐝 SILVER
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Number: of 22990 
Subject: Re: Check Capital Management BRK Options Stragegies
Date: 10/16/23 8:03 AM
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The substantive question is, why do covered writes on brkb vs very liquid spy?

Certainly the premiums on BRK options are usually pretty low, so it's frequently not worthwhile to write them.
But, as for the question about "why not SPY", the risk/reward profile of single stock options is quite different from the risk/reward of the index.
Not to mention that they might have quite different valuation levels, meaning a person might reasonably have very different return expectations.

More interestingly, the risk/reward of an option on the index (or SPY) is quite different from that of the weighted collection of options on all stocks within it.
Even when you adjust for the greater observed volatility of individual stocks.
I presume it's because it's a very different population of option traders, with very different fear and hedging and greed goals in mind.

Jim
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This community has written 22,499 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 · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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