ADI Bull Call Spread Strategy
ADI (Analog Devices, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and high-end consumer markets; and power ICs include performance, integration, and software design simulation tools for accurate power supply designs. It also offers high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and microelectromechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company offers digital signal processing and system products for high-speed numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, the rest of North and South America, Europe, Japan, China, and rest of Asia, as well as through its Website. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.
ADI (Analog Devices, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $211.09B, a trailing P/E of 78.09, a beta of 1.19 versus the broader market, a 52-week range of 206-435.72, average daily share volume of 3.8M, a public-listing history dating back to 1980, approximately 24K full-time employees. These structural characteristics shape how ADI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.19 places ADI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 78.09 is on the rich side, which tends to correlate with higher earnings-window IV expansion as the market debates whether forward growth supports the multiple. ADI pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a bull call spread on ADI?
A bull call spread buys an at-the-money call and sells an out-of-the-money call at a higher strike for defined risk and defined reward bounded by the strike width.
Current ADI snapshot
As of May 15, 2026, spot at $418.24, ATM IV 48.76%, IV rank 96.41%, expected move 13.98%. The bull call spread on ADI below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this bull call spread structure on ADI specifically: ADI IV at 48.76% is rich versus its 1-year range, which makes a premium-buying ADI bull call spread relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 13.98% (roughly $58.47 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ADI expiries trade a higher absolute premium for lower per-day decay. Position sizing on ADI should anchor to the underlying notional of $418.24 per share and to the trader's directional view on ADI stock.
ADI bull call spread setup
The ADI bull call spread below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ADI near $418.24, the first option leg uses a $420.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ADI chain at a 28-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 ADI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $420.00 | $22.05 |
| Sell 1 | Call | $440.00 | $13.65 |
ADI bull call spread risk and reward
- Net Premium / Debit
- -$840.00
- Max Profit (per contract)
- $1,160.00
- Max Loss (per contract)
- -$840.00
- Breakeven(s)
- $428.40
- Risk / Reward Ratio
- 1.381
Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-call strike plus net debit.
ADI bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on ADI. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$840.00 |
| $92.48 | -77.9% | -$840.00 |
| $184.96 | -55.8% | -$840.00 |
| $277.43 | -33.7% | -$840.00 |
| $369.91 | -11.6% | -$840.00 |
| $462.38 | +10.6% | +$1,160.00 |
| $554.85 | +32.7% | +$1,160.00 |
| $647.33 | +54.8% | +$1,160.00 |
| $739.80 | +76.9% | +$1,160.00 |
| $832.28 | +99.0% | +$1,160.00 |
When traders use bull call spread on ADI
Bull call spreads on ADI reduce the cost of a bullish ADI stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
ADI thesis for this bull call spread
The market-implied 1-standard-deviation range for ADI extends from approximately $359.77 on the downside to $476.71 on the upside. A ADI bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on ADI, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current ADI IV rank near 96.41% sits in the upper third of its 1-year distribution, which historically reverts; this raises the bar for premium-buying structures and lowers it for premium-selling structures on ADI at 48.76%. As a Technology name, ADI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ADI-specific events.
ADI bull call spread positions are structurally moderately bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. ADI positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ADI alongside the broader basket even when ADI-specific fundamentals are unchanged. Long-premium structures like a bull call spread on ADI are particularly exposed to IV-crush risk through scheduled events (earnings, FDA decisions, central-bank meetings) where IV typically contracts post-event regardless of the directional outcome. Always rebuild the position from current ADI chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on ADI?
- A bull call spread on ADI is the bull call spread strategy applied to ADI (stock). The strategy is structurally moderately bullish: A bull call spread buys an at-the-money call and sells an out-of-the-money call at a higher strike for defined risk and defined reward bounded by the strike width. With ADI stock trading near $418.24, the strikes shown on this page are snapped to the nearest listed ADI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ADI bull call spread max profit and max loss calculated?
- Max profit equals strike width minus net debit times 100; max loss equals net debit times 100. Breakeven is long-call strike plus net debit. For the ADI bull call spread priced from the end-of-day chain at a 30-day expiry (ATM IV 48.76%), the computed maximum profit is $1,160.00 per contract and the computed maximum loss is -$840.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ADI bull call spread?
- The breakeven for the ADI bull call spread priced on this page is roughly $428.40 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current ADI market-implied 1-standard-deviation expected move is approximately 13.98%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a bull call spread on ADI?
- Bull call spreads on ADI reduce the cost of a bullish ADI stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
- How does current ADI implied volatility affect this bull call spread?
- ADI ATM IV is at 48.76% with IV rank near 96.41%, which is elevated relative to its 1-year range. Premium-selling structures (covered call, cash-secured put, iron condor) generally look more attractive when IV rank is high; premium-buying structures (long call, long put, debit spreads) are more expensive in that regime.