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

Invest Like a Monster - San Antonio: October 9-10

Premium Services

Archived Webinar

Education & Strategy

The covered call and unhedged risk

I have written a few things on the Covered Call Strategy over the last two weeks. Please understand that those two previous articles plus this one do not constitute a proper, fully in-depth lesson on the Covered Call Strategy like we have in our classes at Option Monster Education. I have picked out a few topics that I believe were worth noting and today I am going to add the final one.

View more education articles »