Buffett’s Long-Dated Puts Stir Up Pricing Controversy – ValueWalk Premium
Berkshire Hathaway B shares Warren Buffett

Buffett’s Long-Dated Puts Stir Up Pricing Controversy

Warren Buffett sold a number of large, long-dated put options against various stock indices between 2004 and 2008, and while those puts are definitely liabilities, there seems to be a big disagreement about how much of a liability they should be reported as.


Options normally priced with Black-Scholes
Options are normally priced using the Black-Scholes equation, which takes a number of factors into account, including the asset’s underlying price, interest rate risk, and volatility. Dan McCrum, writing for

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