The question I ask is, why?Both buying an OTM put and writing an OTM call are fundamentally bearish actions.Most folks who are that bearish you probably wouldn't have so much Berkshire stock that hedging would be an issue.If there is to be a price drop, simply riding it out is a valid choice.I don't imagine you think any big bad BRK price drop is going to be permanent.But that aside, an $80 put seems a bit excessive, since that's about book value.We all know that the 1.2x book buyback threshold isn't a floor, but it will probably act a lot like one, mostly, most of the time.So a sell-off to that level seems like a pretty extreme contingency to spend monty preparing for.One thought: buy the put (and/or write the call) on something more overvalued than Berkshire. SPY?If there is a huge sell-off, the overvalued stuff might just drop more than Berkshire.That would be normal...the credit crunch was a rather exceptional situation and I imagine a lot of people held Berkshire on margin or thought it was a stable place to "park" money safely. Oops.Even if we see another crunch, people still remember the 2008/2009 situation and will be a tiny bit smarter about thinking that way.Though I wouldn't bank on it, my expectation is that Berkshire will not sell off as the broader market does in the next bear market.Jim
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