Burlington Northern

Warren Buffett, the worlds greatest investor, is selling December expiration put options in Burlington Northern Railroad (BNI) at the $80 and $77 strike prices. Essentially, he is a buyer of the stock at those prices. Look at it this way: Buffett received a $7 premium for selling the $80 strike, so if the option is exercised, Buffett is only paying $73 per share of BNI ($80 strike - $7 premium). The $77 strike netted Buffett about $5 in premium, so he would be paying around $72 per share if that option is exercised and he is forced to buy. So Buffett is a buyer at $72 and $73.

Any guesses at to where the worlds greatest investor thinks BNI will bottom? According to the two year chart, $72 seems to be a pretty good guess.