Although we did not exit any positions during the quarter, investors may note that we have call options written against our full position in Summit Materials (SUM, Financial). As mentioned earlier, we sometimes use options to manage our long equity exposures. In Summit's case, investors' infrastructure enthusiasm drove up both Summit's equity and the premiums (i.e., the price of a call or put option) for option contracts for its shares. By selling call options on our shares and collecting these premiums, we earn some additional "rent" on our shares. Additionally, should Summit's equity price exceed the "strike" prices of these options at their expiration, we believe the potential sale proceeds combined with the premiums already collected would represent an attractive return.
From Wallace Weitz (Trades, Portfolio)'s Partners III Opportunity Fund first-quarter 2021 commentary.
