DCI Bull Call Spread Strategy
DCI (Donaldson Company, Inc.), in the Industrials sector, (Industrial - Machinery industry), listed on NYSE.
Donaldson Company, Inc. (DCI) is a global enterprise that develops, manufactures, and distributes an extensive range of filtration systems and their corresponding replacement parts. The company's operations are strategically divided into two core business units: Engine Products and Industrial Products. The Engine Products division provides a variety of solutions, including replacement filters for both air and liquid filtration needs, comprehensive air filtration systems, and specialized liquid filtration systems designed for fuel, lubrication, and hydraulic applications. This segment also offers exhaust and emissions control technologies, alongside a suite of sensors, indicators, and monitoring systems. Its clientele primarily consists of Original Equipment Manufacturers (OEMs) within the construction, mining, agriculture, aerospace, defense, and transportation industries. Additionally, it caters to the aftermarket through independent distributors, OEM dealership networks, private label accounts, and major fleet operators.
DCI (Donaldson Company, Inc.) trades in the Industrials sector, specifically Industrial - Machinery, with a market capitalization of approximately $10.26B, a trailing P/E of 23.38, a beta of 0.96 versus the broader market, a 52-week range of 68.96-112.84, average daily share volume of 713K, 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 0.96 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 June 30, 2026, spot at $89.50, ATM IV 474.20%, IV rank 100.00%, expected move 135.95%. 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 52-day expiry.
Why this bull call spread structure on DCI specifically: DCI IV at 474.20% is rich versus its 1-year range, which makes a premium-buying DCI bull call spread relatively expensive in absolute-cost terms, with a market-implied 1-standard-deviation move of approximately 135.95% (roughly $121.67 on the underlying). The 52-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 $89.50 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 $89.50, the first option leg uses a $90.00 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 52-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 | $90.00 | $3.35 |
| Sell 1 | Call | $95.00 | $1.75 |
DCI bull call spread risk and reward
- Net Premium / Debit
- -$160.00
- Max Profit (per contract)
- $340.00
- Max Loss (per contract)
- -$160.00
- Breakeven(s)
- $91.60
- Risk / Reward Ratio
- 2.125
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% | -$160.00 |
| $19.80 | -77.9% | -$160.00 |
| $39.59 | -55.8% | -$160.00 |
| $59.37 | -33.7% | -$160.00 |
| $79.16 | -11.6% | -$160.00 |
| $98.95 | +10.6% | +$340.00 |
| $118.74 | +32.7% | +$340.00 |
| $138.52 | +54.8% | +$340.00 |
| $158.31 | +76.9% | +$340.00 |
| $178.10 | +99.0% | +$340.00 |
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 $-32.17 on the downside to $211.17 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 100.00% 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 DCI at 474.20%. 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 $89.50, 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 474.20%), the computed maximum profit is $340.00 per contract and the computed maximum loss is -$160.00 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 $91.60 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 DCI market-implied 1-standard-deviation expected move is approximately 135.95%; 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 474.20% with IV rank near 100.00%, 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.