boilermaker75

I write anywhere from 20-50 put positions each month. It is not 20-50 different stocks, but different strike prices and expiration dates. In November, so far, I have written 20 put positions on BRKB, WFC, BAC, FB, and MSGE. Most months they all expire OTM. That would not happen doing this with 5 random stocks. When some are ITM near expiration I can buy them back. Sometimes still for a gain if they are near the money. If not, I will sometimes buy them back for a loss and write a put at the same strike price at a later expiration date that would eventually result in a gain. This has always worked with BRKB ever since the B shares started trading. Sometimes I keep the stock. That is when I think of writing a put as a limit order. All my current positions I entered by being put to. I have some BRKB, WFC, and BAC that I have had for around 12 years. It is rare to not be able to acquire a stock by writing an OTM put. This gives me a discipline to wait for my price. The only stock I recall not acquiring, which I wanted, was MCD at a strike price of $90 when MCD was trading in the $90s.

I know, sorry I was flippant in my response.

If the stock falls to $28.01 I make money and you don't make anything, We can play this game all night.

Thanks for the heads up. I was not aware of these.

About 10 years ago I invested $10,000 in HSGFX. After a couple of years I sold my HSGFX as the portfolio I was managing was up about 50% and my HSGFX funds were down slightly. I think I would have probably done better with my own portfolio if I had not had the HSGFX funds. I kept reading Hussman's Market Comments, which kept scaring me.

Same as if you put a limit order in to buy at $28, except you didn't pocket the put premium. You sill have a loss if the stock trades below $28, actually a larger loss by the amount of the put premium. Have you ever bought a stock that didn't ever trade below the price you purchased it at?

I write OTM options. The closer to expiration the closer the strike price to the current price. Today I wrote Nov 19 280-strike BRKB puts. I am currently short Nov 12 280-strike BRKB puts. As some are getting close to expiration I'll write some more.

The usual, wrote 280-strike, Nov 19 expiration puts on BRKB for $1.15 per share.

I've done things similar to all your scenarios. I have kind of gravitated to shorter term puts, sometimes writing them the same week they expire right up to expiration. I like getting the play over with, especially if there are potential margin considerations. Plus as you point out the incremental increase in time premium decreases as you increase the time to expiration. As long as you pick a strike price that is at a good valuation you will do ok. It just limits your profit if the stock takes off. I now do 75% of my put writing on BRKB. BRKB is also my largest position, by far, so if it takes off I am happy! Although I wish it stays here for years so Buffett can buy a lot of it back.

Yes you buy back your current puts at a loss, or just a reduction in your profit, but sell the further out expiration puts at a greater premium. Let's say the strike is $50 and the stock is around $49.5 at closing. You can buy pack the put at about $0.50 and sell the put expiring the next week for much more than $.50, maybe > $1. Or if you had sold the original put for $1.50, you just might want to close the position at a $1 profit.

Excellent first post DJS Edit: and welcome to CoBF Exactly what I do now. Try to roll out the puts if I can pick up enough premium, unless I am doing it to pick up the shares.

Very nice Greg! I made a little money writing calls on PTON, but I should have been buying puts. I kept thinking what do you see in garage sales? Exercise bikes. I should have gone in bigger.

Thanks for those links GFP. So they have a Munger designed dorm with windowless bedrooms at U of Michigan and Munger says students love it and fight to get in it.

No charge till you are put to. Only then are you on margin and charged interest. (Edit: It is like putting in a limit order to purchase a stock that will put you on margin. No interest charged till the order actually executes.) When it is getting close to expiration and it looks like I might get put to, I will buy the put back and sell a further out put at the same strike price. This picks up additional premium and delays going on margin. till hopefully the put expires worthless. This works very well with BRKB. I have been writing puts on BRKB ever since the B shares became available and I have never had a trade where I have lost money.

Thanks, same to you!

As have you!

Should be a fun game this weekend. Go Boilers!

I wrote some BRKB 280-strike Nov 12 expiration puts for $1.61 per share this morning. I would not mind getting these put to me, it would be like buying BRKB today at $278.39. Although it would put me on margin and I would then write some 280-strike covered calls, effectively the same thing as the original put sale. If BRKB closes out of the money I pocket the insurance premium. It is a little like being on margin, but getting paid instead of paying. Edit: I have been doing this for about 25 years.

Exactly what my dorm was like. Of course I only lived there one year!

But not as screwed as if you bought the stock at the higher price. So you do this only if you don't mind owning the stock. It is like you are selling insurance, no different than BRK's main business, except "paying a claim" is actually buying a stock you want to own but at a better price. It is better than the insurance business if done right. Something Buffett used to do often.

It is almost like getting paid for putting in a limit order.

There are fire codes. So they can't build it unless it meets those codes.

From the link, Chancellor Henry Yang has hailed it as “inspired and revolutionary.” I was an Assistant Dean for Henry when he was Dean of Engineering at Purdue, about 30 years ago, until he left to become chancellor of UCSB. If Henry likes the idea it is probably worth doing. Henry is probably the longest running chancellor/president of any major university. It has been a while since I spoke to any faculty at UCSB, but when I did they loved him.

After BRKB, my next three largest positions are BAC, WFC, and BK. Edit: I have also been writing puts. Today I wrote WFC nov 12, 44-strike puts for $1 per share

I learned that too recently, watching an episode of "Republic of Doyle."