Investors Weigh Options on Berkshire Hathaway: Is Selling Puts Worth It?
For those looking to invest in Berkshire Hathaway Inc New (Symbol: BRK.B) but hesitant about its current market price of $461.95 per share, selling put options may be a viable alternative strategy. One noteworthy contract to consider is the December 2026 put with a $370 strike price, which currently offers a bid of $8.60. By selling this put, investors can collect a premium that translates to a 2.3% return based on the $370 commitment, or an annualized rate of 1.2%, which we refer to as YieldBoost at Stock Options Channel.
Choosing to sell a put does not provide the same benefits as owning shares of BRK.B, as the put seller will only acquire shares if the option is exercised. The counterparty will opt to exercise the put if it makes financial sense compared to the current market price. This means Berkshire Hathaway’s shares would need to dip by 19.7% for the contract to be exercised, pushing the effective cost basis down to $361.40 per share (after subtracting the $8.60 premium). Hence, for the put seller, the potential gain is limited to the premium earned or a modest 1.2% annualized rate of return unless significant price changes occur.
The chart below illustrates the trailing twelve-month trading activity for Berkshire Hathaway Inc New, highlighting where the $370 strike price sits in relation to recent performance:
This historical chart and the stock’s volatility can provide crucial insights combined with fundamental analysis. Currently, Berkshire Hathaway’s trailing twelve-month volatility is calculated at 15%, based on the past 249 trading day closing values, alongside the present price of $461.95. For alternative put options with various expiration dates, investors can check out the BRK.B Stock Options page on StockOptionsChannel.com.
Explore Top YieldBoost Puts of Promising Stocks »
Also see:
- Institutional Holders of EDGH
- Top Ten Hedge Funds Holding ASC
- Funds Holding RDVY
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
