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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 21944 
Subject: Re: Check Capital Management BRK Options Stragegies
Date: 10/18/23 4:46 AM
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No. of Recommendations: 13
As a crude rule of thumb, if the one year volatility index is over 22, it's likely there is a useful opportunity for writing options. At 17, look elsewhere.
....
Are you referring to a specific stock's implied volatility for a put/call one year out? Or the current value of VIX?


Neither, really---I was referring to the one year volatility index.
VIX is the one-month-forward index for the S&P 500 stocks.
There is a lesser known one-year-forward index that tells you how expensive longer term options are at the moment.
cboe.com: Cboe Global Indices: VIX1Y Index Dashboard
Using VIX as a guide will give pretty similar results, with different cutoffs, except in periods that something big expected to happen short term.
Since it is so concerned with the short term, it [over]reacts to short term news/noise a lot, and probably isn't representative of the pricing of the sorts of options one is most likely to write.

My intent was just to put a numeric gloss on the idea of considering option writing only when prices are generally good in the market.
You don't want to look at richly priced options on single stocks during a soft market for premiums (like writing insurance only for drunk drivers).
You want to look at options on good single stocks during a hard market. (insure the shy accountants with Camrys, during periods that everybody is asking high premiums even for them)

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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