In the 2002 Berkshire Hathaway chairman's letter, Warren Buffett famously called derivatives 'financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.' The framing was widely quoted in the years that followed; what was less widely quoted was that Berkshire itself was simultaneously running one of the largest disciplined options books in the world. By the 2008 letter, Buffett disclosed that Berkshire had sold approximately $37 billion in notional value of European-style index put options on the S&P 500, FTSE 100, Eurostoxx 50, and Nikkei 225 indices, with expirations 15-20 years out, in exchange for approximately $4.

9 billion in premium received upfront and held as float for the entire holding period. The structure was carefully chosen: European exercise (no early-exercise risk), no margin or collateral calls (the counterparties accepted Berkshire's credit), strike prices well below initial index levels, and durations long enough that the time-value-of-money on the float dominated the worst-case payoff scenarios.