BRK.B Options Signal $495 Put Pressure and $505 Call Optimism: A Hedging Play Amid RSI Overbought Conditions

• BRK.B trades at $500.17, down 0.77% from its 504.04 close, with volume surging to 1.97M shares.
• Put/call open interest ratio hits 0.606, showing 59% more put demand than calls, with heavy concentration at $495 puts.
• RSI at 74.15 suggests overbought conditions, while Bollinger Bands hint at a potential bounce from the 493.91 midline.

Here’s the thing: BRK.B’s options market is screaming about a tug-of-war between cautious hedgers and bullish speculators. The stock’s -0.77% drop today clashes with a short-term bullish Kline pattern and a MACD histogram rising above 0.99. But let’s dig into what the options are really saying.

The $495 Put Wall and $505 Call Rally: A Battle for Control

The options chain is a chessboard. This Friday’s $495 puts (OI: 4,953) form a massive wall of support, while the $505 calls (OI: 1,900) and $510 calls (OI: 2,442) show aggressive bullish bets. Think of it like a football game: the defense (puts) is stacking up to stop a breakaway, but the offense (calls) is charging forward.

The block trades on the $520–$530 puts (expiring 9/19) are wild. Four separate trades totaling 1,800 contracts at $520–$525 puts suggest big players are hedging against a deeper pullback. But here’s the twist: those puts expire in just two weeks, so they’re likely protecting against a short-term selloff, not a long-term collapse.

News: Alphabet Wins vs. Long-Term Viability Doubts

Berkshire’s 40% gain on Alphabet is a win, but the headlines are mixed. On one hand, Buffett’s bet on Google and the Magnificent 7 narrative boosts BRK.B’s tech credibility. On the other, articles like Berkshire May Not Come Back and Net Margin Fluctuations whisper doubts about its ability to adapt.

This creates a paradox: investors love the short-term momentum from Alphabet and Gemini 3 AI, but they’re hedging against long-term uncertainty. That’s why the $495 puts exist—they’re a safety net for a stock that’s both a market darling and a legacy giant.

Trading Plays: Calls for Breakouts, Puts for Protection

If you’re bullish but cautious, buy the $505 calls expiring 12/5 (OI: 1,367). Why? The 504.64 intraday high is just 0.47% above current price. A break above that could trigger a rally toward the 517.04 upper Bollinger Band. Target entry: $504.64; exit near $510 if the 50-day MA (493.44) holds.

For hedgers, the $495 puts expiring 11/28 (OI: 4,953) are a no-brainer. The stock is already testing the 497.17 intraday low. If it dips below 492.99 (200D support), those puts could surge. Entry: $497.17; target: $490 if the 491.40–492.15 support zone fails.

Volatility on the Horizon: A Stock at a Crossroads

BRK.B isn’t just a stock—it’s a barometer for investor sentiment. The options data and news flow point to a stock caught between legacy strength and tech-driven optimism. The RSI overbought warning and MACD divergence suggest a pullback is likely, but the $495 put wall could turn that into a buying opportunity.

Bottom line: This is a stock where patience pays off. If you’re in, protect with the $495 puts. If you’re bullish, chase the $505 calls. Either way, the next two weeks will tell us if Buffett’s magic still works in a post-pandemic world.