Today, after Cloudflare (NET) shares fell significantly since January 26th when we bought 100 shares and wrote our first covered-call position. NET has had a remarkable year and we seem to have bought at a near all-time high in NET shares. Our investment of NET, $8,938, has generated $778.43 in covered call net premiums for a return of 8.7% in 41 days. Unfortunately, our position in NET shares is down 25%.
Today our fourth covered call on NET (strike: $77; expiration: 12MAR2021) closed to net about $75 as NET trades around $67. The four call option contracts we sold on NET were very short-dated, but, to find a more attractive liquidation point, I wrote today’s new NET contract to expire on 01APR2021, four trading weeks from today. We sold the contract for $100 at an execution price of $80 per NET share. My calculations indicate our breakeven point on NET is about $81.50 so, if our shares are called away, we’ll lose about $50 on our initial $8.9k.