sell puts as way of buying stock at low price

Warren Buffett Continues to Sell Burlington Northern Santa Fe Puts, Berkshire Hathaway Reports
- the page shows 4 txs each with 1 milion shares/puts

three factors 1) Buffet did it 2) low target is 81 as shown below ( may be 1 yr target )
3) 3 year avarge low was 80 from chart
- you can do SSF buy and sell PUTS .. to collect $7 premium and stock can go till $72 , still no loss for you, if it stays at $77 still $3 that is 20% return in 2 months of SSF price $17 ( for $80 stock ) ..

Mean Target: 106.83
Median Target: 112.00
High Target: 120.00
Low Target: 81.00
No. of Brokers: 12

Buffett Makes a Bullish Bet:


asr: what a nice way to lower your cost if you are interested buying a stock and holding for long time like 3 to 6 months. You can easily buy for 6 to 8% cheaper with this ' selling PUTS ' .

Buffett Makes a Bullish Bet:
unit of his company, Berkshire Hathaway (NYSE: BRK-A - News, BRK-B - News), sold puts in railroad Burlington Northern Santa Fe (NYSE: BNI - News), according to filings with the SEC.


The puts have strike prices of $77 and $80 and expire in December. By selling the puts, Berkshire has pocketed a premium and is obligated to purchase Burlington Northern at $80 and $77 if the stock is trading below those prices on the day the option expires. Essentially, Buffett is betting that Burlington Northern is unlikely to drop below around $71, his effective cost basis if the $77 puts are exercised. (His cost basis on the $80 puts is around $73).

The bottom line is that Buffett appears to be maintaining his bullish view of railroads, a view that he has held since early 2007 when he first disclosed investments in the sector.