Bloomberg's Levine Weighs In On Buffett's OTC Derivative Trades

The Warren Buffett derivative trading mystery grows, as Bloomberg’s Matt Levine takes aim at FT Alphaville series written by Dan McCrum and raises questions. Readers will recall that in Wednesday’s ValueWalk we reported on Warren Buffett utilizing exotic derivatives in his portfolio management.  In particular, he sold a long-dated put option on three stock indices in what was known as “Worst of Basket Put Option.”  This is an exotic option that pays only on one of three stock indices, the one that has the best payout structure.  Levine points out in his article, “this is some pretty racy stuff for…