BRK.B at Crossroads: Call OI Surges at $520 as Puts Signal $450 Floor – Here’s How to Play the Transition

• BRK.B trades at $492.80, down 0.89% amid leadership uncertainty and Buffett’s exit.
• Options data shows call open interest surging at $520 (next Friday) while puts dominate at $450–$475.
• Block trades in deep puts ($520–$530) hint at institutional hedging ahead of Abel’s leadership shift.

Here’s the takeaway: BRK.B is caught between short-term bearish momentum and long-term bullish positioning. The stock’s 1.4% drop today aligns with a fragile technical setup, but options data suggests a battle for $500 is brewing. Let’s break down what traders should watch.

Where Bulls and Bears Are Betting: The $520 Call vs. $450 Put Showdown

The options market is split. For next Friday’s expiry (Dec 19), BRKB20251219C520 leads with 6,874 open contracts—triple the $510 call’s 6,280. This suggests some investors expect a rebound above the 200-day moving average ($498.27) and a test of the $505 resistance level. Conversely, puts at BRKB20251219P450 (3,559 OI) and BRKB20251219P475 (3,759 OI) signal a floor near $450–$475 if sentiment deteriorates.

Block trades in September-dated puts ($520–$530) add intrigue. While these expire in 2025, the sheer volume (e.g., 440 contracts at $525) implies large players are hedging against a prolonged selloff. This isn’t a short-term bet—it’s a signal that some investors see downside risk beyond the immediate transition period.

Buffett’s Exit and Apple Sales: Fuel for the Fire

Warren Buffett’s retirement and Todd Combs’ departure have rattled confidence. The news cycle is packed: Apple stake reductions, Kraft Heinz criticism, and Greg Abel’s looming leadership. These stories amplify the stock’s volatility. But here’s the twist: Buffett’s $382 billion cash pile and recent AI/tech investments (e.g., Alphabet) hint at a strategic pivot. Morningstar’s $510 fair value estimate suggests the stock is undervalued near $493, but the market is pricing in execution risk.

Investor perception is key. If Abel can stabilize operations and leverage Berkshire’s cash for undervalued assets, the $500–$520 range could attract buyers. But if the leadership transition stumbles—say, through talent attrition or failed AI bets—the $450–$480 zone becomes a critical test.

Actionable Trades: Calls for Breakouts, Puts for Protection

For options traders, the BRKB20251219C520 call is a high-conviction play. If BRK.B closes above $505 by Dec 19, this strike could see explosive gains. For a safer bet, consider a BRKB20251219P475 put to hedge against a breakdown below the 200D MA. Both strikes align with open interest hotspots and key technical levels.

Stock traders should focus on price levels:

• Entry near $494.97 (lower Bollinger Band) if support holds.
• Target $504.66 (30D/200D resistance) for a short-term rebound.
• Stop-loss below $492.22 (intraday low) to avoid a breakdown into $480 territory.

Volatility on the Horizon: Balancing Risk and Reward

Berkshire’s transition is a classic case of "buy the rumor, sell the news." The next two weeks will test Greg Abel’s ability to stabilize operations. If BRK.B holds above $494, the $500–$520 range could become a battleground for bulls. But if the stock cracks $480, the puts at $450–$475 may dominate. Either way, the options market is pricing in a volatile finish to 2025. Stay nimble—this stock isn’t done surprising us.