BRK.B's Options Signal a Bearish Imbalance: How Traders Can Navigate the $490 Put Play and Upcoming Volatility

• BRK.B trades at $511.07, up 1.7% on heavy volume, but put open interest dwarfs calls at a 0.63 ratio
• Massive $490 put block trades ($3M+ turnover) hint at institutional bearishness ahead of Sept 2025 expiry
• RSI at 61.18 and MACD divergence suggest short-term bullish momentum could clash with long-term bearish positioning

Here's the thing: BRK.B looks like a stock caught between a rock and a hard place. On one hand, technicals show a short-term bullish breakout. On the other, options data tells a different story—institutional players are aggressively buying puts at $490, and the open interest imbalance screams caution. This isn't just noise—it's a warning sign for traders who want to stay ahead of the curve.

The $490 Put Wall and Whale Moves That Demand Attention

Let's start with the most eye-catching number: 3,078 open puts at $490 for next Friday's expiry. That's not just a strike—it's a fortress. When you see puts at $490 (current price is $511) with such volume, it means smart money is hedging against a sharp drop. The block trades backing this up are even more telling: $3M+ in put turnover at $490 and $480 for September 2025. These aren't retail traders—they're whales positioning for a potential 4%+ correction.

But here's the twist: calls at $550 have 582 open contracts. That's a 10%+ strike above current price. Why would anyone buy such deep OTM calls? Because they're betting on a parabolic move—maybe from a Berkshire Hathaway spinoff or a rare earnings beat. The risk? If BRK.B stays in its $480–$520 range, those calls expire worthless.

The MacDivergence and RSI Signal a Tug-of-War

Technicals add nuance. The MACD histogram at 2.18 shows bullish momentum, but the signal line (-0.99) is still negative. It's like a car accelerating forward with the emergency brake partially engaged. The RSI at 61.18 isn't overbought yet, but the Bollinger Bands (middle at $489.14) suggest support is forming just below current price. If BRK.B breaks below $489.14, watch the $473.63 lower band—that's where the puts at $480 and $490 could get triggered.

Trading Opportunities: Where to Play the Imbalance

For options traders, the most attractive setup is a short put spread at $490. Sell the $490 puts expiring next Friday (OI: 3,078) and buy the $480 puts (OI: 2,125) to cap risk. Why? The high OI at $490 means there's liquidity, and the block trades suggest a strong bid. If BRK.B holds above $489.14, you collect the premium. If it drops, the $480 put acts as a safety net.

For directional bets, consider a diagonal call spread. Buy the $520 calls expiring next Friday (OI: 1,888) and sell the $515 calls this Friday. The $520 strike is just 2% out of the money but has solid OI. If BRK.B breaks above its 200D MA ($495.60), this spread could capitalize on the short-term bullish momentum while limiting downside.

Stock traders should watch two key levels:

• Entry: Consider buying near $491.71 (30D support) if BRK.B breaks above its 200D MA ($495.60)
• Target: If the stock holds above $489.14, aim for $515–$520 as resistance levels
• Stop: Below $480 would validate the bearish put positioning

Volatility on the Horizon: Preparing for BRK.B's Next Move

The next 30 days will be critical. If BRK.B can't break above $520, the heavy call OI at that strike could create a ceiling. Conversely, a drop below $490 would validate the put positioning and likely trigger a cascade of stop-loss orders. The block trades in September 2025 puts suggest some players are already planning for a longer-term decline—maybe from a broader market selloff or a shift in Warren Buffett's investment strategy.

Here's the bottom line: BRK.B isn't just a stock—it's a barometer for market sentiment. Right now, the options market is pricing in a potential 4–6% correction, but technicals still show short-term bullish momentum. The smart play? Hedge your bets. Buy the calls for a quick pop if the stock breaks out, but short the puts at $490 to profit from the bearish positioning. In this tug-of-war between bulls and bears, the ones who survive will be the ones who adapt—fast.