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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" 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 22351 
Subject: Fun with options
Date: 09/29/26 12:37 PM
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A fella writing some put options on Berkshire, say 1-4 quarters out and at strikes above the current price, could get some very good entry prices today with the stock at $500.60 as I type.

By the time they're exercised (if they are), the value of a share will have risen to the point that the entry price will look really great. Maybe under 1.3 times book, depending on the choice of date and strike. And you'll get interest on your cash till they are exercised (if they are). If you pick relatively high strikes, the absolute amount of the premium is quite large, so the rate of return is excellent if they do happen to expire worthless, or you can often close them early for an extremely nice return if the stock price pops up briefly. The cash backing up the puts continues to earn interest, which is not negligible these days.

Just a thought : )

One note:
High strike (in the money) puts are much more likely to get exercised soonish compared to other options, so you might not get interest on your cash for the full period if you pick very high strikes. Pick higher strikes if you really want them exercised.

Jim
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This community has written 21,861 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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