BRK.B Poor Man's Covered Call: Strike Selection, Premium & Risk
How to sell poor man's covered calls on Berkshire Hathaway Inc. Class B — optimal strikes, expected premium, and the risks that actually matter for a mega-cap financial name.
Is BRK.B a good poor man's covered call candidate?
BRK.B (Berkshire Hathaway Inc. Class B) is a mega-cap financial name with an elevated share price and excellent options liquidity. Implied volatility is low, so premiums are modest. Traders use this name when they want stability and a low probability of assignment rather than maximum yield. It pays no dividend, so every dollar of income must come from the options you sell.
Strike selection for a BRK.B poor man's covered call
For a BRK.B PMCC, buy a long-dated call with 0.80+ delta (typically 12-18 months out) as your synthetic long, then sell short-dated calls 3-5% above the stock price at 0.25-0.35 delta. The LEAPS tie up roughly 30-50% of the capital of buying 100 shares, which is especially valuable on an elevated share price ticker like BRK.B.
Expected premium and income on BRK.B
Typical monthly premium collected on BRK.B runs around 0.5-1.0% of capital, which annualizes to roughly 6-12% if you sell new contracts every cycle. Capital required to run a single contract wheel on BRK.B is $20,000+ — the share price and the 100-share lot size set the minimum, not the strategy.
Risk management for BRK.B poor man's covered call trades
PMCC risk is concentrated at the LEAPS expiration: if the stock collapses, the long-dated call can lose significant value quickly. You also have to manage the short call not going deep in the money against you before your LEAPS appreciates equivalently. BRK.B is a low-volatility name — the main risk is not sudden moves but slow grinds against you, which hurt covered-call writers who picked strikes too close to the money. Financials are sensitive to the yield curve, credit spreads, and Fed decisions; rate-decision days frequently produce outsized moves.
BRK.B Poor Man's Covered Call FAQ
Can you run a poor man's covered call on BRK.B?
Yes. Buy a 0.80+ delta LEAPS on BRK.B dated 12-18 months out as your synthetic long, then sell short-dated calls 3-5% above the stock at 0.25-0.35 delta. Capital tied up drops from $20,000+ to roughly 30-50% of that — a meaningful improvement when the share price is an elevated share price.
What expiration should I use for BRK.B poor man's covered call trades?
Use 30-45 DTE as a default for BRK.B. This is the classic theta sweet spot and works well on a stable ticker like this.
Is BRK.B suitable for beginners selling options?
Yes — it's a well-known, liquid name with established options markets, which is what beginners need.
Related BRK.B strategies
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