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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: mungofitch ✹🐝🐝🐝🐝 SILVER
SHREWD   😊 😞
Number: of 15059 
Subject: Re: Check Capital Management BRK Options Stragegies
Date: 10/19/2023 4:01 AM
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Ooops, these explanations are hard enough to understand without typos that make the logic backwards.
It was supposed to say: (changed words in bold)


The exuberant punters bought a bunch of very short dated out-of-the money calls. They had low delta (they move little with each $1 rise in the stock price) because they were at strikes considerably above the stock price.
These calls were sold to them by market makers, who ended up synthetically short the stock by being short calls. Only a little bit short because of the low delta, but they don't like to be net short.
So, at the same time, the market makers hedged their position by buying some stock. Not too much was needed--low delta again.

Jim
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