ALGM Cash-Secured Put 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 cash-secured put on ALGM?
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.
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 cash-secured put 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 cash-secured put structure on ALGM specifically: ALGM IV at 70.70% is mid-range versus its 1-year history, so the credit collected on a ALGM cash-secured put sits in line with its long-run distribution, 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 cash-secured put setup
The ALGM cash-secured put 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 $40.00 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) |
|---|---|---|---|
| Sell 1 | Put | $40.00 | $4.50 |
ALGM cash-secured put risk and reward
- Net Premium / Debit
- +$450.00
- Max Profit (per contract)
- $450.00
- Max Loss (per contract)
- -$3,549.00
- Breakeven(s)
- $35.50
- Risk / Reward Ratio
- 0.127
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
ALGM cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put 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% | -$3,549.00 |
| $9.58 | -77.9% | -$2,591.72 |
| $19.16 | -55.8% | -$1,634.45 |
| $28.73 | -33.7% | -$677.17 |
| $38.30 | -11.5% | +$280.11 |
| $47.87 | +10.6% | +$450.00 |
| $57.45 | +32.7% | +$450.00 |
| $67.02 | +54.8% | +$450.00 |
| $76.59 | +76.9% | +$450.00 |
| $86.16 | +99.0% | +$450.00 |
When traders use cash-secured put on ALGM
Cash-secured puts on ALGM earn premium while a trader waits to acquire ALGM stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning ALGM.
ALGM thesis for this cash-secured put
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 cash-secured put lets a trader earn premium while waiting to acquire ALGM 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 ALGM IV rank near 51.28% is mid-range against its 1-year distribution, so the IV signal is neutral; the cash-secured put 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 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. 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. Short-premium structures like a cash-secured put on ALGM carry tail risk when realized volatility exceeds the implied move; review historical ALGM earnings reactions and macro stress periods before sizing. Always rebuild the position from current ALGM chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on ALGM?
- A cash-secured put on ALGM is the cash-secured put strategy applied to ALGM (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 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 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 ALGM cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 70.70%), the computed maximum profit is $450.00 per contract and the computed maximum loss is -$3,549.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a ALGM cash-secured put?
- The breakeven for the ALGM cash-secured put priced on this page is roughly $35.50 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 cash-secured put on ALGM?
- Cash-secured puts on ALGM earn premium while a trader waits to acquire ALGM stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning ALGM.
- How does current ALGM implied volatility affect this cash-secured put?
- 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.