BRK.B's Options Imbalance and Whale Moves Signal a $520 Bullish Threshold – Here's How to Position

• Price action: BRK.B fell 0.64% to $509.805, trading below its 30D and 200D moving averages.
• Options heat: Put open interest dwarfs calls (224K puts vs. 352K calls), but $520 call OI spikes ahead of Friday’s expiry.
• Whale alert: $1.5M+ block trades in $520 puts suggest institutional bearishness, yet $520 calls hint at a key resistance test.

Here’s the thing: BRK.B’s options market is a tug-of-war between cautious bears and opportunistic bulls. The stock’s technicals and Warren Buffett’s looming retirement create a unique setup where volatility could swing either way—but the data points to a clear upside bias if $520 holds. Let’s break it down.

The Options Imbalance: Bears Dominate, But Bulls Are Ready to Strike

The options chain tells a story of fear and anticipation. For Friday’s expiry, $480 puts (3849 OI) and $520 calls (696 OI) stand out. But the real drama is in next Friday’s contracts: $520 calls (2224 OI) and $490 puts (3047 OI) form a tight battle line.

The put/call ratio of 0.637 (puts lagging calls) suggests investors are hedging downside risk, not betting aggressively. Yet the $520 call OI spike (2224 contracts) hints at a psychological threshold. Think of it like a dam holding back water—once BRK.B breaks above $520, those calls could ignite a rally.

Then there’s the block trading: $1.5M+ in $520 puts traded last week. That’s not retail noise—it’s institutional money betting on a near-term dip. But here’s the twist: Buffett’s recent stock sales and Berkshire’s petrochemical bets (more on that later) mean the company’s fundamentals are still robust. If the block traders are right, the $520 level could be a golden opportunity for contrarians.

Warren’s Exit and the Petrochemical Play: Why the Market Is Nervous

Buffett’s $1.4B charitable giveaway and the separation of chairman/CEO roles have investors second-guessing Berkshire’s long-term stability. But the news isn’t all bad. The $9.7B Occidental petrochemical buy and Buffett’s recent stock sales (noted in Q3 earnings) show the company is adapting to a shifting energy landscape.

The market’s bearishness makes sense—Buffett’s retirement is a wildcard. But Berkshire’s core businesses (insurance, railroads, utilities) remain resilient. The key question is whether the stock’s 0.64% drop today reflects panic or prudent caution. Given the RSI at 66.5 and MACD histogram at 2.98, the technicals suggest a pullback is more likely than a crash.

Trade Ideas: How to Play the $520 Bull Case and Hedge the DownturnFor options traders:

• Bullish play: Buy $520 calls expiring next Friday (OI: 2224). If BRK.B closes above $520, these could see a 10–15% pop.
• Bearish hedge: Buy $490 puts (OI: 3047) to protect against a drop below the 200D MA ($495.82).

For stock traders:

• Entry near $488.40 (30D support) with a stop just below $485. If the stock holds, target $520 as a short-term ceiling.
• Alternative: Sell covered calls at $520 if you’re bullish on the long-term but want to lock in gains.

Volatility on the Horizon: The Buffett Factor

The next two weeks will be critical. Buffett’s retirement timeline and Berkshire’s Q4 earnings (due Nov 15) could sway sentiment. If the stock tests $490 without breaking it, the $520 call OI could become a catalyst. But if the block traders’ bearish bets materialize, the $480–$485 range will be a key battleground.

Bottom line: BRK.B is at a crossroads. The options market is pricing in risk, but the technicals and fundamentals still lean bullish. For traders, the $520 level is both a target and a warning sign. Position accordingly—and keep an eye on Buffett’s next move.