Berkshire Puts

Berkshire Hathaway(BRK.A or BRK.B) is the investment vehicle of one of the greatest value investors ever: Warren Buffett. Warren recently announced(or at least I recently heard about it...not sure when he actually said it) that he would buy back as much BRK stock as he could at or below 1.1 times book value. This effectively puts a floor on the stock price of about $108,500 per "A" share or $72 per "B" share since anytime the stock drops below that, Buffett will put Berkshire's cash to work(and Berkshire has a LOT of cash). Since I have no problem owning Berkshire long term, this gives me an easy option trade.

• Sell to Open: BRKB Jan 20 2012 67.5 Put @ $2.30

I chose the $67.50 strike just because it gives me a little bit of a buffer zone. It was only about $0.50 less than the $70 options, and saved a little margin space.

The Numbers

• Cash: +$230
• Short Option: -$230
• Margin: -$1050