Ray,

How do you do with your options. I ask, because I hear different things. Some say you can't do well with options, and then I see people like Jim making a killing using them.

I made a killing in 1999/2000, then got a bloody nose when the tech bust hit. Elan reports that he has overall done well with 6/3 options, but the volatility is too high for me.

In recent years I've stuck to buying DITM long-dated calls, mostly BRK but a few others as well. Nowhere near Jim's 10's of thousands of option trades.

I do keep close track of the results, and of the performance of the calls vs. the stock itself.
For every $10,000 invested it has grown to $44,000 for the stock and $117,200 for the options.

The average actual leverage has been 2.08X, vs. average estimated/predicted average of 2.8X. Average ITM was 34%.
I think that the difference was because the estimate assume you hold until expiration, which has generally not been the case.

Berkshire Hathaway FAQ

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