I bought some BRK Jan'24 DITM call LEAPS from late last Summer which have worked out pretty well (so far). How would you approach the handling of these over the coming months given your experience & BRK price rise since October?

I can't give you investment advice but I do happen to own a slug of Jan24 contracts that I purchased in the fall of 2021 (rolls of Jan22 contracts) and the summer of 2022 (putting leverage back on after pulling back that spring). I still have a day job and my personal situation may be much different than yours so please do your own due diligence. I highly recommend reading Jim's posts on the subject. He is vastly better at articulating the details than I am.

I try to keep my decision points on BRK leaps rather simple. Ideally I would like to buy them at times when BRK is trading in the lower quartile of price/IV and sell when they are in the upper quartile. If we equate that to price/bv I would like to buy under 1.31x and sell at something over 1.42x. I also like to keep my level of exposure spread somewhat evenly across expiration dates to limit risk of needing to make a large cash infusion to maintain leverage if needed.

I would like to roll my JAN24s to JAN26 contracts when they become available sometime in Sept or Oct this fall if the forward returns look attractive. I'm currently a little overweight on the JAN24 so I may choose to roll some to JAN25 at some point. I personally calculate current IV to be $350-$360/share and year end maybe $370-$380 so if I see share prices near those ranges I may reduce my leverage overall and buy shares or hold cash instead. My opinion on IV could change too if net income from Ops comes in weak again in Q2.


Jeff

Berkshire Hathaway FAQ

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