Here's How Much Berkshire Hathaway Made On Financial Weapons Of Mass Destruction In Q3
Berkshire Hathaway may have missed on its earnings, but its long bets on global stock markets are paying off even better in Q3 than it did in Q2.
Berkshire made $519 million on 'financial weapons of mass destruction' in Q3.
For those less colorful than Buffett himself, this is how much Berkshire made on long-term derivative bets on major global stock markets.
Back in 2008 when everything was going to the dogs, Berkshire sold put options on the S&P 500, FTSE 100, Euro Stoxx 50, and the Nikkei 225.
That means that if those indices fall below a certain price, Berkshire has to pay whoever bought the put options. When stocks go up, the value of these options increases — when stocks go down, they decrease. As Business Insider's Sam Ro never fails to point out, these are European style options, which means they can only be exercised at maturity.