Idiot. I added the SPX year-end close to show that his $9B liability was exceeded. See... 903 is LESS than 1135. Why oh why did you delete the screen cap? This really is too good to be true.
The expiration liability is what matters to the acolytes, until it doesn't, and then they use BSM when they assume it lessens the MTM loss. You can use the $9B liability at 1135 (Buffett's own numbers on SPX) to solve for a $delta and gamma at 890 on SPX. He's currently sitting on a $12 index put that he sold at $5. This assumes that the notional risk across all four indices is approximately equally distributed. If equally-distributed, Buffett is light on marks (bad for BRK). The acolytes will chime in that only expiration matters... tell that to the banks who just cashed a >$5B paycheck.
No asskiss, you keep changing your story just as you keep changing your posts as I refute them. First of all, this quote of yours was what I originally took issue with: Here's that missing screen capture which shows how I responded and how you originally responded to me: -------------- screen capture------------- <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516452> -------------- screen capture------------- Then you added some more crap, obviously after reading what I wrote more carefully and checking Berkshire's letter. But the bottom line is, I've been arguing with you because Berkshire has exposure to the S&P 500, FTSE 100, Euro Stoxx 50 and Nikkei 225. And you can't jump to conclusions about the S&P with the liability for the TOTAL exposure unless you know the EXACT exposure Berkshire has in each of the indexes. Now you talk about assumptions about exposure, but only AFTER I called you on it here: http://www.elitetrader.com/vb/showthread.php?s=&postid=2516377#post2516377 Piss off loser.
Wrong again asskiss. There is no "$9B liability at 1135." There has to be a 25% drop in ALL FOUR INDEXES for that. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516524>
Wrong yet again asskiss. That's not what "acolytes" say. That's what reasonable people say because those are the terms of the contracts. But you know nothing about reasonable <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516535>
Unfortunately for 666 and his offspring, 666 used the end of year value (903) to define Buffett's $9B liability. Buffett's own admission marked the $9B liability to 1135 All of your deleted posts, edits and gibberish won't change the maths that Buffett saw fit to include in the letter. It gets better... Buffett proceeded to shorten duration during 2009 to 10-years and lowered the SPX put strike to 994, adding to his losses as the adjustment was done in the 800s in SPX. Short from $5, bidding $12.
They can't force an assignment, but it's irrelevant to the put-buyers. They could have: Crossed the trade with a new counterparty; 100% term for term. Shorted variance from vol-lines of anywhere from 40-80 on VIX. Bought calls, shorted puts, bought spot, bought risk-reversals. There was nothing restricting them from booking the billions in gains, other than the capital required to effect the hedge. Crossing the contract would be the obvious choice as it requires no capital outlay.
Oh please... are you so desperate that you need to pretend I said things I did not? There is no $9B liability at 1135. Three other indexes must also decline exactly 25% and exchange rates must remain unchanged. What part of that can't your B- brain understand? <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516524>
Here you go again... don't pretend you were talking about the put buyers. Tell us who they are and who their "acolytes" are. NONE of this matters to Berkshire. ONLY the price on the final day does. That's what reasonable people say because those are the terms of the contracts. And you've proven my point that you know nothing about reasonable.
You are without a doubt the dumbest mofo alive. Bottom of page 9, where I mention the counterparty trade was "phenomenal". I mention the buyer's billions in gains no less than a dozen times on this thread. http://www.elitetrader.com/vb/showt...6&perpage=6&highlight=put buyers&pagenumber=9 Buffett's counterparties book billions, top of page 19: http://www.elitetrader.com/vb/showthread.php?s=&threadid=170996&perpage=6&pagenumber=19 I suggest you stop quoting acolyte and steal a dictionary. You'll want to avoid the chart comparing the SPX against the remaining indices in that trade: The SPX outperformed all but the FTSE in 2008. Meaning that the MTM is far worse when adding the remaining indices. So the foreign market additions increase the marked-loss. You're done.