DCI Bull Call Spread Strategy
DCI (Donaldson Company, Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through two segments, Engine Products and Industrial Products. Its Engine Products segment provides replacement filters for air and liquid filtration applications; air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense, and transportation markets; and to independent distributors, OEM dealer networks, private label accounts, and large fleets. The company's Industrial Products segment offers dust, fume, and mist collectors; compressed air purification systems; gas and liquid filtration for food, beverage, and industrial processes; air filtration systems for gas turbines; polytetrafluoroethylene membrane-based products; and specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, indicators, and monitoring systems. This segment sells its products to various dealers, distributors, OEMs of gas-fired turbines, and OEMs and end-users requiring air filtration solutions and replacement filters.
DCI (Donaldson Company, Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $9.72B, a trailing P/E of 25.63, a beta of 1.00 versus the broader market, a 52-week range of 67.71-112.84, average daily share volume of 691K, a public-listing history dating back to 1980, approximately 14K full-time employees. These structural characteristics shape how DCI stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.00 places DCI roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. DCI 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 DCI?
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 DCI snapshot
As of May 15, 2026, spot at $81.64, ATM IV 33.30%, IV rank 5.78%, expected move 9.55%. The bull call spread on DCI 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 DCI specifically: DCI IV at 33.30% is on the cheap side of its 1-year range, which favors premium-buying structures like a DCI bull call spread, with a market-implied 1-standard-deviation move of approximately 9.55% (roughly $7.79 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 DCI expiries trade a higher absolute premium for lower per-day decay. Position sizing on DCI should anchor to the underlying notional of $81.64 per share and to the trader's directional view on DCI stock.
DCI bull call spread setup
The DCI 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 DCI near $81.64, the first option leg uses a $80.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DCI 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 DCI shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $80.00 | $6.00 |
| Sell 1 | Call | $85.00 | $3.35 |
DCI bull call spread risk and reward
- Net Premium / Debit
- -$265.00
- Max Profit (per contract)
- $235.00
- Max Loss (per contract)
- -$265.00
- Breakeven(s)
- $82.65
- Risk / Reward Ratio
- 0.887
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.
DCI bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on DCI. 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% | -$265.00 |
| $18.06 | -77.9% | -$265.00 |
| $36.11 | -55.8% | -$265.00 |
| $54.16 | -33.7% | -$265.00 |
| $72.21 | -11.6% | -$265.00 |
| $90.26 | +10.6% | +$235.00 |
| $108.31 | +32.7% | +$235.00 |
| $126.36 | +54.8% | +$235.00 |
| $144.41 | +76.9% | +$235.00 |
| $162.46 | +99.0% | +$235.00 |
When traders use bull call spread on DCI
Bull call spreads on DCI reduce the cost of a bullish DCI stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
DCI thesis for this bull call spread
The market-implied 1-standard-deviation range for DCI extends from approximately $73.85 on the downside to $89.43 on the upside. A DCI bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on DCI, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current DCI IV rank near 5.78% sits in the lower third of its 1-year distribution, where IV often re-expands toward the mean; this favors premium-buying structures and disadvantages premium-selling structures on DCI at 33.30%. As a Industrials name, DCI options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DCI-specific events.
DCI 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. DCI positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DCI alongside the broader basket even when DCI-specific fundamentals are unchanged. Long-premium structures like a bull call spread on DCI 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 DCI chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on DCI?
- A bull call spread on DCI is the bull call spread strategy applied to DCI (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 DCI stock trading near $81.64, the strikes shown on this page are snapped to the nearest listed DCI chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DCI 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 DCI bull call spread priced from the end-of-day chain at a 30-day expiry (ATM IV 33.30%), the computed maximum profit is $235.00 per contract and the computed maximum loss is -$265.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DCI bull call spread?
- The breakeven for the DCI bull call spread priced on this page is roughly $82.65 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 DCI market-implied 1-standard-deviation expected move is approximately 9.55%; 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 DCI?
- Bull call spreads on DCI reduce the cost of a bullish DCI 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 DCI implied volatility affect this bull call spread?
- DCI ATM IV is at 33.30% with IV rank near 5.78%, which is on the low end of its 1-year range. Premium-buying structures (long call, long put, debit spreads) are relatively cheap in this regime; premium-selling structures collect less credit per unit risk.