Investors Weigh Selling Puts on Berkshire Hathaway Shares

Investors contemplating the acquisition of Berkshire Hathaway Inc New (Symbol: BRK.B) shares, priced at $513.63 each, may want to explore an alternative strategy: selling puts. One noteworthy option is the December 2026 put at a $350 strike price, currently offering a bid of $9.10. This premium translates to a 2.6% return based on the $350 commitment, which annualizes to a 1.6% return.

It’s important to note that selling a put does not provide the same upside potential as owning shares. Instead, the put seller acquires shares only if the contract is exercised. The other party would choose to exercise the option at the $350 strike only if it yields a better outcome than selling at the current market price. The contract would only be exercised if Berkshire Hathaway shares decline by 31.8%, resulting in a cost basis of $340.90 per share after accounting for the $9.10 premium (excluding broker commissions). Thus, the primary benefit for the put seller lies in collecting the premium, equating to a 1.6% annualized return.

Below is a chart displaying the trailing twelve-month trading history for Berkshire Hathaway Inc New, with the $350 strike highlighted relative to this history:

Combining the chart above with Berkshire Hathaway’s historical volatility and fundamental analysis can help assess whether the December 2026 put at the $350 strike offers a good risk-reward profile. The trailing twelve-month volatility for Berkshire Hathaway, based on the past 249 trading day closing values and the current price of $513.63, is calculated to be 20%. For a range of other put options at varying expirations, consult the BRK.B Stock Options page online.

In mid-afternoon trading on Monday, the put volume among S&P 500 components reached 810,250 contracts, matched by call volume, which also stood at 810,250, yielding a put:call ratio of 0.72. This figure exceeds the long-term median put:call ratio of 0.65, indicating a heightened level of put buying activity compared to historical norms based on call buyers. As such, there are more put buyers than traditionally expected in the options market today.

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Additional Information:

• FTEL YTD Return
• PXJ Options Chain
• Institutional Holders of AAN

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.