Re: Why dont value investors write more covered calls?
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Buffett wrote puts on KO once when the price got low, but not low enough to buy more. And he's got billions in long dated index puts (ten years or more) that essentially force him to buy the index if the price drops 30% or so.
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He did the KO puts because he wanted to buy the stock cheap. He wins either way. It's an especially good technique to buy huge blocks with, because it doesn't hit the tape and drive the price up.
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The problem with writing puts like this is tying up capital.
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The premium received more than compensates for the carrying costs of tying up the capital.
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