Reply to thread

Message

<blockquote data-quote="Up In Smoke" data-source="post: 5429859" data-attributes="member: 79702"><p>Warren and Berkshire maintain a sizable options position (40B dollars).&nbsp; They spread these options across the 4 major indexes (S&amp;P, FTSE 100, Euro Stoxx 50 and Nikkei 225)&nbsp; Using the Black-Scholes Model they sell long term put options in the OTC market.&nbsp; These contracts are European and thus can not be exercised prior to expiration.&nbsp; I use a similar strategy only at a much smaller scale and shorter time frame.&nbsp; I also trade in the US market where I can exercise prior to expiration. I&#039;m not timing the market, just insuring that my loses are capped and if they move enough, I will make money in a downward moving market.&nbsp; Options are a cheap hedge against a volatile market.&nbsp; Options buying has hit record levels over the last 2 months and should continue until the Fed achieves it&#039;s end game.&nbsp; So Warren is right, stay in the market but hedge your investments with options to ensure the best guaranteed outcome.</p></blockquote><p></p>

[QUOTE="Up In Smoke, post: 5429859, member: 79702"] Warren and Berkshire maintain a sizable options position (40B dollars). They spread these options across the 4 major indexes (S&P, FTSE 100, Euro Stoxx 50 and Nikkei 225) Using the Black-Scholes Model they sell long term put options in the OTC market. These contracts are European and thus can not be exercised prior to expiration. I use a similar strategy only at a much smaller scale and shorter time frame. I also trade in the US market where I can exercise prior to expiration. I'm not timing the market, just insuring that my loses are capped and if they move enough, I will make money in a downward moving market. Options are a cheap hedge against a volatile market. Options buying has hit record levels over the last 2 months and should continue until the Fed achieves it's end game. So Warren is right, stay in the market but hedge your investments with options to ensure the best guaranteed outcome. [/QUOTE]

Verification