Today our covered-call option contract for Appian (APPN) closed on its initial limit order. We sold the call option (strike: $280; expiration: 21MAY2021) on 11March2021 for $249.30 and closed it today to net $148.61. APPN was down nearly 4.5% on the day but was about four dollars higher than the closing price when our option was closed. Our limit order to close was the lone bid but I am happy to take our nearly $150 and run with nearly two months until expiration.
I will wait for an up day and sell another covered call option with a strike well out-of-the-money. APPN has been a stunning success for us even though it is down significantly from its high in January. Once our position is classified as a long-term position (for tax purposes), I’ll write contracts with more aggressive strike prices to trim the position. Were our shares distributed via this May 21 contract our capital gain would have been considered long term, but it was well out-of-the-money when I initiated the position. I want a covered-call option contact with an aggressive strike to be short-dated where as the contract closed today had about two and a half months to expiration when initiated.