Options Trading News

February 5, 2013  Tue 1:16 AM CT

Berkshire Hathaway saw heavy call selling yesterday as it came off Friday's multi-year highs.

optionMONSTER systems show that a trader sold more than 5,000 September 100 calls, including a block of 1,025 for $3.05 and another 4,100 for $3. The previous open interest at the strike was just 71 contracts, so this is clearly new activity.

The calls selling wasn't tied to any trading in the underlying shares identified by our systems yesterday. The options could have been sold naked, but they were much more likely traded against an existing long position in a covered call strategy. The latter would suggest that the trader sees the stock in a limited range in coming months. (See our Education section)

BRK.B was down 1.5 percent to close at $96.51 yesterday. Friday's close of $98 and intraday high of $99 were the financial conglomerate's highest levels since the all-time adjusted high just above $101 from the end of 2007. Shares have run up from support at $84 in the last three months.
Share this article with your friends


Premium Services

Education & Strategy

The art of trading

As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

View more education articles »