DCI Cash-Secured Put 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 cash-secured put on DCI?
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 DCI snapshot
As of May 15, 2026, spot at $81.64, ATM IV 33.30%, IV rank 5.78%, expected move 9.55%. The cash-secured put 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 cash-secured put structure on DCI specifically: DCI IV at 33.30% is on the cheap side of its 1-year range, which means a premium-selling DCI cash-secured put collects less credit per unit of strike-width risk, 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 cash-secured put setup
The DCI 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 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) |
|---|---|---|---|
| Sell 1 | Put | $80.00 | $3.33 |
DCI cash-secured put risk and reward
- Net Premium / Debit
- +$332.50
- Max Profit (per contract)
- $332.50
- Max Loss (per contract)
- -$7,666.50
- Breakeven(s)
- $76.68
- Risk / Reward Ratio
- 0.043
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
DCI cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put 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% | -$7,666.50 |
| $18.06 | -77.9% | -$5,861.51 |
| $36.11 | -55.8% | -$4,056.51 |
| $54.16 | -33.7% | -$2,251.52 |
| $72.21 | -11.6% | -$446.52 |
| $90.26 | +10.6% | +$332.50 |
| $108.31 | +32.7% | +$332.50 |
| $126.36 | +54.8% | +$332.50 |
| $144.41 | +76.9% | +$332.50 |
| $162.46 | +99.0% | +$332.50 |
When traders use cash-secured put on DCI
Cash-secured puts on DCI earn premium while a trader waits to acquire DCI stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning DCI.
DCI thesis for this cash-secured put
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 cash-secured put lets a trader earn premium while waiting to acquire DCI 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 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 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. 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. Short-premium structures like a cash-secured put on DCI carry tail risk when realized volatility exceeds the implied move; review historical DCI earnings reactions and macro stress periods before sizing. Always rebuild the position from current DCI chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on DCI?
- A cash-secured put on DCI is the cash-secured put strategy applied to DCI (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 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 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 DCI cash-secured put priced from the end-of-day chain at a 30-day expiry (ATM IV 33.30%), the computed maximum profit is $332.50 per contract and the computed maximum loss is -$7,666.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DCI cash-secured put?
- The breakeven for the DCI cash-secured put priced on this page is roughly $76.68 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 cash-secured put on DCI?
- Cash-secured puts on DCI earn premium while a trader waits to acquire DCI stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning DCI.
- How does current DCI implied volatility affect this cash-secured put?
- 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.