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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
SHREWD
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Number: of 21941 
Subject: Re: Option Volatility
Date: 02/01/24 7:02 AM
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No. of Recommendations: 13
I'm going back to sleep now - wake me up next January and let me know what happened.

Sounds like you did a fine job overall. It's hard to see a bad outcome.

But that last comment...I suggest you keep an eye on the market rather than entirely ignoring it. Or at least half an eye.

It is extremely common for there to be a price drop before expiry, and they frequently don't last all that long. A price drop frequently offers the opportunity to close the position early, making (say) 75-80% of the maximum possible profit in (say) less than half the maximum elapsed time. The annualized rate of return is of course much better, and you no longer have that short call contract "hanging over your head" as it were. Plus, if the price gets lofty again, you can do it all again.

For example, during the late October price dip I was closing calls I had written last August, realizing a nice (but not complete) profit. And I started writing new ones again this January, effectively getting paid again to commit to selling the same shares again.

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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