ALGM Bull Call Spread Strategy
ALGM (Allegro MicroSystems, Inc.), in the Technology sector, (Semiconductors industry), listed on NASDAQ.
Allegro MicroSystems, Inc. designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; power ICs comprising motor driver ICs, and regulator and LED driver ICs; and photonic and 3D sensing components, including photodiodes, eye-safe lasers, and readout ICs for LiDAR applications. The company sells its products to original equipment manufacturers and suppliers primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
ALGM (Allegro MicroSystems, Inc.) trades in the Technology sector, specifically Semiconductors, with a market capitalization of approximately $8.52B, a beta of 2.02 versus the broader market, a 52-week range of 22.41-51.4, average daily share volume of 2.2M, a public-listing history dating back to 2020, approximately 5K full-time employees. These structural characteristics shape how ALGM stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 2.02 indicates ALGM has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position.
What is a bull call spread on ALGM?
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 ALGM snapshot
As of May 15, 2026, spot at $43.30, ATM IV 70.70%, IV rank 51.28%, expected move 20.27%. The bull call spread on ALGM 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 98-day expiry.
Why this bull call spread structure on ALGM specifically: ALGM IV at 70.70% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 20.27% (roughly $8.78 on the underlying). The 98-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated ALGM expiries trade a higher absolute premium for lower per-day decay. Position sizing on ALGM should anchor to the underlying notional of $43.30 per share and to the trader's directional view on ALGM stock.
ALGM bull call spread setup
The ALGM 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 ALGM near $43.30, the first option leg uses a $42.50 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed ALGM chain at a 98-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 ALGM shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $42.50 | $6.80 |
| Sell 1 | Call | $45.00 | $5.70 |
ALGM bull call spread risk and reward
- Net Premium / Debit
- -$110.00
- Max Profit (per contract)
- $140.00
- Max Loss (per contract)
- -$110.00
- Breakeven(s)
- $43.60
- Risk / Reward Ratio
- 1.273
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.
ALGM bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on ALGM. 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% | -$110.00 |
| $9.58 | -77.9% | -$110.00 |
| $19.16 | -55.8% | -$110.00 |
| $28.73 | -33.7% | -$110.00 |
| $38.30 | -11.5% | -$110.00 |
| $47.87 | +10.6% | +$140.00 |
| $57.45 | +32.7% | +$140.00 |
| $67.02 | +54.8% | +$140.00 |
| $76.59 | +76.9% | +$140.00 |
| $86.16 | +99.0% | +$140.00 |
When traders use bull call spread on ALGM
Bull call spreads on ALGM reduce the cost of a bullish ALGM stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
ALGM thesis for this bull call spread
The market-implied 1-standard-deviation range for ALGM extends from approximately $34.52 on the downside to $52.08 on the upside. A ALGM bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on ALGM, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current ALGM IV rank near 51.28% is mid-range against its 1-year distribution, so the IV signal is neutral; the bull call spread thesis on ALGM should anchor more to the directional view and the expected-move geometry. As a Technology name, ALGM options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to ALGM-specific events.
ALGM 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. ALGM positions also carry Technology sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move ALGM alongside the broader basket even when ALGM-specific fundamentals are unchanged. Long-premium structures like a bull call spread on ALGM 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 ALGM chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on ALGM?
- A bull call spread on ALGM is the bull call spread strategy applied to ALGM (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 ALGM stock trading near $43.30, the strikes shown on this page are snapped to the nearest listed ALGM chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are ALGM 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 ALGM bull call spread priced from the end-of-day chain at a 30-day expiry (ATM IV 70.70%), the computed maximum profit is $140.00 per contract and the computed maximum loss is -$110.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ALGM bull call spread?
- The breakeven for the ALGM bull call spread priced on this page is roughly $43.60 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 ALGM market-implied 1-standard-deviation expected move is approximately 20.27%; 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 ALGM?
- Bull call spreads on ALGM reduce the cost of a bullish ALGM 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 ALGM implied volatility affect this bull call spread?
- ALGM ATM IV is at 70.70% with IV rank near 51.28%, 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.