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Berkshire Hathaway Inc. Message Board

  • axpkocop axpkocop Feb 27, 2013 3:50 PM Flag

    Grandma Sells Call Options on BRK Today

    She needed cash to maintain her monthly distribution check which is due to be sent out tomorrow.
    If she's forced to buy it back in September at 110 she will to avoid a large tax bill. A bought a little too much LO today thus the need for this added cash.

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    • What was I thinking? These options were sold for only 1.15/sh today they're trading over 4.

      She only sold options against 35% of her shares. I'll most likely buy them back in September so as to avoid paying taxes and possibly sell 10-15% of her BRK' shares to reposition her portfolio.

      Note: She did increase her position by 10% earlier this year at much lower prices.

      • 1 Reply to axpkocop
      • Another bad move-bought these options back today for 3.8/share---net loss about 2.7 per share after commissions.

        Had to buy them back early because if the options were called early the taxes would have killed her. That's the last time she sells options against BRK.

        She has three other stocks that could be called away in the next four months which is why her account is only up about 11% this year.

 
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