ADP Cash-Secured Put Strategy
ADP (Automatic Data Processing, Inc.), in the Technology sector, (Software - Application industry), listed on NASDAQ.
Automatic Data Processing, Inc. (ADP) is a global provider of cloud-based solutions designed for human capital management (HCM). The company organizes its operations into two primary segments: Employer Services and Professional Employer Organization (PEO). Through its Employer Services division, ADP delivers strategic, cloud-powered platforms and comprehensive human resources (HR) outsourcing. This encompasses a wide array of services such as payroll processing, benefits administration, talent acquisition and management, general HR and workforce management, insurance, retirement planning, and regulatory compliance, often integrated into holistic HCM solutions. Conversely, the Professional Employer Organization (PEO) segment specializes in offering HR outsourcing to small and mid-sized businesses, leveraging a co-employment framework. This segment's offerings span robust benefits packages, regulatory protection and compliance, talent engagement strategies, specialized HR expertise, all-encompassing outsourcing, and even recruitment process outsourcing.
ADP (Automatic Data Processing, Inc.) trades in the Technology sector, specifically Software - Application, with a market capitalization of approximately $107.66B, a trailing P/E of 24.37, a beta of 0.82 versus the broader market, a 52-week range of 188.16-310.08, average daily share volume of 2.8M, a public-listing history dating back to 1980, approximately 67K full-time employees. These structural characteristics shape how ADP stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.82 places ADP roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. ADP pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a cash-secured put on ADP?
A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike.
ADP snapshot
As of August 14, 2026, spot at $272.78, ATM IV 28.24%, IV rank 59.16%, expected move 8.09%. The cash-secured put on ADP below is built from the August 14, 2026 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 cash-secured put structure on ADP specifically: ADP IV at 28.24% is mid-range versus its 1-year history, so the credit collected on a ADP cash-secured put sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 8.09% (roughly $22.08 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 ADP expiries trade a higher absolute premium for lower per-day decay. Position sizing on ADP should anchor to the underlying notional of $272.78 per share and to the trader's directional view on ADP stock.
ADP cash-secured put setup
The ADP cash-secured put below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With ADP at $272.78 on that close, the first option leg uses a $260.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ADP 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 ADP shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Sell 1 | Put | $260.00 | $3.43 |
ADP cash-secured put risk and reward
- Net Premium / Debit
- +$342.50
- Max Profit (per contract)
- $342.50
- Max Loss (per contract)
- -$25,656.50
- Breakeven(s)
- $256.58
- Risk / Reward Ratio
- 0.013
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
ADP cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put on ADP. 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% | -$25,656.50 |
| $60.32 | -77.9% | -$19,625.29 |
| $120.63 | -55.8% | -$13,594.09 |
| $180.95 | -33.7% | -$7,562.88 |
| $241.26 | -11.6% | -$1,531.68 |
| $301.57 | +10.6% | +$342.50 |
| $361.88 | +32.7% | +$342.50 |
| $422.19 | +54.8% | +$342.50 |
| $482.51 | +76.9% | +$342.50 |
| $542.82 | +99.0% | +$342.50 |
When traders use cash-secured put on ADP
Cash-secured puts on ADP earn premium while a trader waits to acquire ADP stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning ADP.
ADP thesis for this cash-secured put
The market-implied 1-standard-deviation range for ADP extends from approximately $250.70 on the downside to $294.86 on the upside. A ADP cash-secured put lets a trader earn premium while waiting to acquire ADP at the strike price; the strategy is most attractive when the trader is comfortable holding the underlying at that level and IV is rich enough to compensate for the assignment risk. Current ADP IV rank near 59.16% is mid-range against its 1-year distribution, so the IV signal is neutral; the cash-secured put thesis on ADP should anchor more to the directional view and the expected-move geometry. As a Technology name, ADP options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ADP-specific events.
ADP cash-secured put positions are structurally neutral to slightly 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. ADP positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ADP alongside the broader basket even when ADP-specific fundamentals are unchanged. Short-premium structures like a cash-secured put on ADP carry tail risk when realized volatility exceeds the implied move; review historical ADP earnings reactions and macro stress periods before sizing. Always rebuild the position from current ADP chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on ADP?
- A cash-secured put on ADP is the cash-secured put strategy applied to ADP (stock). The strategy is structurally neutral to slightly bullish: A cash-secured put sells an out-of-the-money put while holding cash equal to the strike-times-100 obligation, keeping the premium when the underlying stays above the strike. With ADP stock at $272.78 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed ADP chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are ADP cash-secured put max profit and max loss calculated?
- Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium. For the ADP cash-secured put priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 28.24%), the computed maximum profit is $342.50 per contract and the computed maximum loss is -$25,656.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ADP cash-secured put?
- The breakeven for the ADP cash-secured put priced on this page is roughly $256.58 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The ADP market-implied 1-standard-deviation expected move in the same options snapshot is approximately 8.09%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a cash-secured put on ADP?
- Cash-secured puts on ADP earn premium while a trader waits to acquire ADP stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning ADP.
- How does current ADP implied volatility affect this cash-secured put?
- ADP ATM IV is at 28.24% with IV rank near 59.16%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.