Warren Buffett still bullish in railroad stock BNI

Warren Buffett sells another 1.95 million shares of put options of Burlington Northern Santa Fe (BNI) on Oct. 8, two days after he sold 1.3 million shares on Oct. 6, as the latest filings of Berkshire Hathaway shows.

The transactions on Oct. 8 include two types of contracts. One is 1.19 million shares of puts at the premium of $7.03 per contract. The put option is exercisable until Dec. 9, 2008 at the strike prices of $80 a share. The other is 761,111 shares of put at $5.78 a share. It is exercisable until the same date at the strike price of $77.

Doing these type of naked puts is what I call "getting paid to buy the stock you wanted anyways."