Covered Calls on Berkshire Hathaway (BRK.B)
Then the safest play you could make is with Berkshire Hathaway (BRK.B). The Berkshire B shares are the only way to use options.
Uncle Warren’s stock is trading under $127. This presents a slight problem because it is dead smack in the middle of two wide strike prices. I would select the September $130 call and sell it for $2.42. It’s not a massive premium, but this is the most conservative play for a reason. The 1.9% return is potentially augmented if the stock gets called away by a 2.4% capital gain.
As of this writing, Lawrence Meyers was long BRK.B. He is president of Asymmetrical Media Strategies, a crisis PR firm, and PDL Broker, Inc., which brokers financing, strategic investments and distressed asset purchases between private equity firms and businesses. He also has written two books and blogs about public policy, journalistic integrity, popular culture, and world affairs. Contact him at email@example.com and follow his tweets at @ichabodscranium.