Warren Buffett has been active in snapping up shares of railroad stocks when he has been able to, such as Burlington Northern Santa Fe Corp. (NYSE: BNI). He has done this generally writing PUT OPTION contracts to collect a high premium, and if the stock falls under the strike price it means that Warren would have liked to buy it there anyway. After reviewing the options activity and open interest screens from the week, there was some unusual activity in the BNI Calls and Puts. You never know if it was Buffett making a new trade or if it was entirely unrelated. Here were the options traded…..
$60.00 Strike, 5,204 contracts and an open interest listed as only 325 contracts.
$65.00 Strike, 10,512 contracts and an open interest listed as only 3,533 contracts.
$50.00 Strike, 6,604 contracts and prior open interest listed as only 431 contracts.
$55.00 Strike, 4,500 contracts and prior open interest listed as only 771 contracts.
$70.00 Strike, 7,529 contracts and prior open interest listed as only 8,716 contracts.
Berkshire Hathaway Inc. (NYSE: BRK-A) owned over 76.77 million shares of Burlington Northern as of March 31, 2009. Again, you never know if this was Buffett or if it was another holder or just a speculator making options trading. Some of the activity fits that pattern and some is questionable.
To see how active Buffett is in owning railroads, you can peruse a list of his most recent transactions via his most recent full list of holdings.