Warren Buffett is famous for buying great businesses and holding them forever.
But he also used a quieter tool — put options — to generate billions in premium on Coca-Cola and global stock indexes.
Today I break down exactly why those trades worked, and how individual investors can apply the same principles at any account size.
What You’ll Learn
- The 1993 Coca-Cola put trade
- The index put trades (2004–2008)
- Why Buffett sold 15–20 year puts and what made long-dated options especially attractive
- How standard pricing models can overprice very long-dated options
- The key difference between Buffett’s European-style index puts and standard stock puts
- 5 principles I use in my own trading based on Buffett’s approach
- Why put selling is really just a way to get paid while you wait for a price you already want
- Real trades I’m currently holding: Boston Scientific, Robinhood, McDonald’s
- The honest differences between Berkshire’s balance sheet and a retail account
- Why I call these “boring old man trades” — and why boring works
I’ll use Interactive Brokers Risk Navigator to show my current positions, the P&L, and the risk graph.
Timestamps
- 00:00 Start
- 00:28 The Core Idea
- 00:45 The Coca-Cola Trade
- 01:15 The Index Puts
- 01:37 Why Sell Long-Term Puts
- 02:19 What Retail Traders Can Copy
- 03:30 My Long-Term Put at Interactive Brokers
- 05:59 The Risks
- 06:53 Summary
Featured Videos
- Why I’m Selling 2-Year Puts (And Why Most Traders Won’t)
- Most Traders Have No Bear Market Plan. Here’s Mine.
Helpful Resources
- Cash-Secured Put (CSP) Calculator
- Option Wheel Tracker Spreadsheet
- Wheel eBook
- How to Fix Losing Options Trades
- 10-Part Iron Condor Course
- Options Trading 101
- OTIQ Best Articles
- Master Credit Spreads
Related Videos
- Why I’m Selling 2-Year Puts (And Why Most Traders Won’t)
- SOXL is a Trap for Investors – But a Goldmine for Option Sellers
- Why Boring Trades Are the Best Trades (After 22 Years of Options Trading)
- The Options Strategy That Profits Whether the Market Goes Up OR Down
- 5 Options Trading Mistakes That Are Destroying Your Account
- Bull Put Spreads – How to Pick Your Strike and Spread Width Every Time
- How to Fix Losing Options Trades (Cash Secured Puts, Spreads and Condors)
- What to Do When Your Cash Secured Put Goes Against You (Roll It)
- Why Stop Losses DON’T Work for Options (Do This Instead)
- The Exact Strike and DTE Framework for Selling Covered Calls
Original source: https://optionstradingiq.com/warren-buffett-options-strategy/
