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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: tedthedog 🐝  😊 😞
Number: of 15058 
Subject: Re: put premiums on BRKB
Date: 04/12/2025 1:17 PM
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The quotes above seem to be on a per contract basis i.e. per 100 shares.
Today (not market hours) with VIX at 37, I see a Sept 2025 strike 400 BRK/B put at bid 5.20 ask 5.60
Take mid of 5.40 for argument sake: 5.40/(400-5.40)*365/160= 0.03 or 3%
Add 3% to 4% of cash and it definitely helps but doesn't seem all that large.
Owning BRK at 1.3 book isn't a bad outcome either (or you could turn around and sell the shares, or could write covered calls on them to make it go away, or could close the position before assignment looks likely).

Put premiums depends quite heavily on volatility.
Luckily for us put writers, we are seeing lots of vol spikes lately, I've taken advantage of it in other trades.
By just waiting a bit for one of the now seemingly inevitable vol spikes, one could probably get an extra 4%-5% instead of 3% to add to the cash interest of 4%. Jim had a post somewhere where he noted some very nice effective interest on BRK put writing.

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