Our Cloudflare covered-call option contract (NET; strike: $85; expiration: 23APR2021) was closed on our standing limit order as NET shares continued to be quite volatile. Our position in the contract was only active for three days. We opened the position when NET traded above $79 per share on 13APR but retreated to close at $74.24 just two days later on Friday.
We netted $65.63 on the trade and though our cost basis for our 100 shares is $89.30, through our covered-call contracts, we’ve reduced the effective breakeven price to $80.80. When NET shares reverse their recent downward trend, we’ll write another opportunistic covered-call option contract.
