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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Engr27   😊 😞
Number: of 15052 
Subject: Re: Calls: end of an era?
Date: 10/27/2023 10:03 PM
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So would this be the equation for the implied interest rate?

call premium/strike price

An example:
The Jan'26 $190 call would cost about $169, while the stock is $331.71

331.71 - 169 = 162.71 the amount "borrowed" to control a share

To exercise the call (at expiration) would cost $190. So 162.71 is borrowed and 190.00 is repaid, approximately 27 months from now.

(190.00 / 162.71)^(12/27) = 1.071 The implied annual interest rate is 7.1%
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