DGX Bull Call Spread Strategy
DGX (Quest Diagnostics Incorporated), in the Healthcare sector, (Medical - Diagnostics & Research industry), listed on NYSE.
Quest Diagnostics Incorporated provides diagnostic testing, information, and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine testing, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to patients, clinicians, hospitals, independent delivery networks, health plans, employers, direct contract entities, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile paramedics, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians robust information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.
DGX (Quest Diagnostics Incorporated) trades in the Healthcare sector, specifically Medical - Diagnostics & Research, with a market capitalization of approximately $21.13B, a trailing P/E of 20.50, a beta of 0.60 versus the broader market, a 52-week range of 164.65-213.5, average daily share volume of 911K, a public-listing history dating back to 1996, approximately 55K full-time employees. These structural characteristics shape how DGX stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.60 indicates DGX has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. DGX 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 DGX?
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 DGX snapshot
As of May 15, 2026, spot at $187.25, ATM IV 24.00%, IV rank 39.09%, expected move 6.88%. The bull call spread on DGX 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 34-day expiry.
Why this bull call spread structure on DGX specifically: DGX IV at 24.00% 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 6.88% (roughly $12.88 on the underlying). The 34-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated DGX expiries trade a higher absolute premium for lower per-day decay. Position sizing on DGX should anchor to the underlying notional of $187.25 per share and to the trader's directional view on DGX stock.
DGX bull call spread setup
The DGX 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 DGX near $187.25, the first option leg uses a $185.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed DGX chain at a 34-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 DGX shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $185.00 | $7.10 |
| Sell 1 | Call | $195.00 | $2.75 |
DGX bull call spread risk and reward
- Net Premium / Debit
- -$435.00
- Max Profit (per contract)
- $565.00
- Max Loss (per contract)
- -$435.00
- Breakeven(s)
- $189.35
- Risk / Reward Ratio
- 1.299
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.
DGX bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on DGX. 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% | -$435.00 |
| $41.41 | -77.9% | -$435.00 |
| $82.81 | -55.8% | -$435.00 |
| $124.21 | -33.7% | -$435.00 |
| $165.61 | -11.6% | -$435.00 |
| $207.01 | +10.6% | +$565.00 |
| $248.42 | +32.7% | +$565.00 |
| $289.82 | +54.8% | +$565.00 |
| $331.22 | +76.9% | +$565.00 |
| $372.62 | +99.0% | +$565.00 |
When traders use bull call spread on DGX
Bull call spreads on DGX reduce the cost of a bullish DGX stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
DGX thesis for this bull call spread
The market-implied 1-standard-deviation range for DGX extends from approximately $174.37 on the downside to $200.13 on the upside. A DGX bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on DGX, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current DGX IV rank near 39.09% is mid-range against its 1-year distribution, so the IV signal is neutral; the bull call spread thesis on DGX should anchor more to the directional view and the expected-move geometry. As a Healthcare name, DGX options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to DGX-specific events.
DGX 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. DGX positions also carry Healthcare sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move DGX alongside the broader basket even when DGX-specific fundamentals are unchanged. Long-premium structures like a bull call spread on DGX 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 DGX chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on DGX?
- A bull call spread on DGX is the bull call spread strategy applied to DGX (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 DGX stock trading near $187.25, the strikes shown on this page are snapped to the nearest listed DGX chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are DGX 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 DGX bull call spread priced from the end-of-day chain at a 30-day expiry (ATM IV 24.00%), the computed maximum profit is $565.00 per contract and the computed maximum loss is -$435.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a DGX bull call spread?
- The breakeven for the DGX bull call spread priced on this page is roughly $189.35 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 DGX market-implied 1-standard-deviation expected move is approximately 6.88%; 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 DGX?
- Bull call spreads on DGX reduce the cost of a bullish DGX 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 DGX implied volatility affect this bull call spread?
- DGX ATM IV is at 24.00% with IV rank near 39.09%, 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.