Options Selling News: Buffet Splitting His Class B Shares

Related options selling news:

Warren Buffett’s Berkshire Hathaway has set the date for a shareholders meeting related to its planned acquisition of Burlington Northern Santa Fe.

In a preliminary proxy statement filed this morning with the SEC, Berkshire gives notice that a special meeting of shareholders will be held at 9:30a on Wednesday, January 20, 2010, at Omaha’s Holland Performing Arts Center.     

Shareholders are being asked to approve a 50-for-1 split of Berkshire’s Class B shares, without splitting the higher-priced Class A shares.

That split would bring Class B shares down from about $3300 each (at today’s price) to roughly $66 each.

In an interview with CNBCjust after the Burlington deal was announced about a month ago, Buffett told us:

“I’m not big on stock splits. But by having this split, it enables anybody that has as little as one share of BNSF to opt for the tax-free exchange… So those small shareholders can have exactly the same availability that otherwise would only have been available to a big shareholder.”

What’s in it for Options Selling?

So what? Well in my opinion this is good news for option sellers. Why? Because Berkshire is a good stable stock. Not volatile and now well priced to sell options on. I am going to be keeping an eye on this one. Who knows? It might become on of my favorite stocks to do income strategies on. Time will tell.

Not yet sure about Options Trading?

The majority of option traders lose money. Why? Because they do not understand that the options game is rigged against option buyers. Option Sellers make the bulk of the profits by being the house (casino) while the option buyers are the gamblers.  And everyone know, the house always wins. While most investors are ecstatic with 10% yearly returns, our style aims to make 10% MONTHLY gains.

The rewards of options investing can be far greater than the potential gains of buying or selling stock. However, the risks are also greater. For those of us who love the extra challenge of option investing, it is worth every minute of time you spend. Check out our blog and options training section and learn the art of selling options.

3 Comments

  1. SYED on January 5, 2010 at 1:14 pm

    Good idea but you are not going to collect much premium by selling puts on Berkshire.
    What will be your comments.
    waiting for your reply!

    • Genius on January 7, 2010 at 5:26 pm

      We will have to see when they come out how much premium they have. I am assuming the stock will not move much in price and be something like a Coke (KO) or Wal-Mart (WMT)

  2. Syed Ahmed on January 7, 2010 at 10:51 pm

    You are very right. Good to own as long as Mr. Buffet is alive and good. I wish him long life. But if he is not there then stock might go south and can be good for option sellers. Again I wish him long and good life. What you think?

Leave a Reply Cancel Reply





This site uses Akismet to reduce spam. Learn how your comment data is processed.