Berkshire Hathaway B (BRK.B) Options Signal Bullish Bias as Post-Buffett Transition Unfolds – Key Plays at $505/$485

• BRK.B opens 2026 with a 1.7% drop to $493.89, breaking below its 30D support at $503.99
• Call open interest dominates (343K vs. 184K puts), with heavy positioning at $505 and $510 strikes
• Block trades of 440+ puts at $525 strike (expiring Sept 2025) hint at institutional hedging

The market is sending a clear message: despite the emotional drag of Warren Buffett’s exit, institutional players are quietly positioning for a rebound. Let’s unpack why this post-Buffett transition might be the calm before a technical breakout.

Bullish Options Pressure vs. Bearish Block Trades: A Tale of Two Sentiments

The options chain tells two stories. On the surface, BRK.B looks weak - down 1.7% with volume spiking to 3.1 million shares. But dig into the open interest, and the picture flips. Calls at the $505 and $510 strikes (expiring this Friday) have 7,048 and 2,076 contracts outstanding respectively, while puts at $485 (this week) and $460 (next week) show heavy bearish positioning. This creates a fascinating tug-of-war: retail traders are betting on a rebound to $505+, while institutions are hedging against a deeper pullback to $485.

The block trades add another layer. Over 800 puts at the $525 strike (BRKB20250919P525) traded in bulk last September, suggesting large players were hedging against a hypothetical 5% drop. With BRK.B now sitting just 5% below that level, those same players might be re-evaluating their positions.

News Flow: Leadership Transition Creates Short-Term Noise, Not Long-Term Risk

Greg Abel’s CEO handoff has rattled short-term nerves, but Buffett’s reassurances (“Greg will be the decider”) and Berkshire’s $381B cash hoard provide a safety net. The market’s 1.5% drop on transition day mirrored broader indices, not a Berkshire-specific selloff. This suggests the move is more about psychological adjustment than fundamental weakness. Abel inherits a company with 10 straight years of positive returns - a track record few CEOs can match.

Actionable Trading Setups for 2026-01-02

For options traders, the most compelling plays are:

• Bull Call Spread: Buy BRKB20260102C505 ($505 call expiring Friday) at ~$3.25, sell BRKB20260102C510 ($510 call) at ~$2.10. Targets a rebound to $508+ with limited risk.
• Bear Put Diagonal: Buy BRKB20260109P485 ($485 put expiring next Friday) at ~$5.75, hold through volatility. Protects against a test of Bollinger Band support at $491.38.

For stock traders, consider:

• Entry at $493.89: With RSI at 61.5 and MACD above signal line, look for a bounce off the lower Bollinger Band ($491.38). Target $505 if the 200D MA at $498.05 holds.
• Stop-Loss Strategy: Place stops below $485 if the stock breaks the $492.91 intraday low. This aligns with heavy put open interest and recent block trade activity.

Volatility on the Horizon: Navigating the Post-Buffett Uncertainty

The next 72 hours will test BRK.B’s resolve. With the 200D MA acting as a psychological floor and call open interest clustering near $505, the stock could see a mean reversion play. But don’t ignore the bearish tail - those $460 puts with 2,179 contracts outstanding suggest some players expect a 4% drop by mid-January. The key will be watching volume at the $500 level: if calls there maintain liquidity, the bulls have a fighting chance.

This is a stock at a crossroads. The options market is pricing in both a rebound and a deeper correction, while the news flow remains neutral. For traders, that duality creates opportunities - just make sure your risk management keeps pace with the volatility.