No. of Recommendations: 2
OK, now that I have *currently* all the data, I'm trying to understand the strategy.
As of close today (7/25/25), we have BRK-B at 484.07, given the WMA trendline, we have the "trend price" at 415.3, and the standard deviation over the past 20 years at 11.4%, thus our CALL target is 463 and our PUT target is 368.
That is, the CALL is DITM, and the PUT is DOTM. When looking at the entire options table for Sept 19, 25 (two-months out), I cannot find a CALL + PREMIUM that is that low, the STRIKE+PREMIUM is petty much flat at ~490 from a strike of 250 to 460 (it starts to go up slowly from there).
My understanding of the strategy is that when the stock is that high above the trendline, you are expecting the stock to revert to the trendline and thus the calls get cheaper to buy back as the price falls, at least on average over repeated covered call sales.
On the put side, the target is achievable at a strike of 365, but the time premium is essentially nothing (< 1%) Again, it seems the idea of the put is to harvest the time premium while it stays well above the trendline, but this seems like there is nothing to harvest at this level of out of the moneyness.
Am I interpreting this correctly?
Thanks, G.
