RDN Bull Call Spread Strategy
RDN (Radian Group Inc.), in the Financial Services sector, (Insurance - Specialty industry), listed on NYSE.
Operating across the United States, Radian Group Inc. and its various subsidiaries are key players in the mortgage and real estate services sector. Through its Mortgage segment, the company delivers crucial credit-related insurance, predominantly private mortgage insurance for primary residential loans. This division also furnishes a suite of credit risk management, contract underwriting, and fulfillment services. Its principal clientele includes a broad spectrum of mortgage originators, ranging from large mortgage and commercial banks to savings institutions, credit unions, and community banks. Radian's Homegenius segment provides an extensive array of services. These encompass comprehensive title services, such as both insured and uninsured title solutions, tax and title data management, centralized document recording, retrieval, and default curative actions, along with deed and property reports.
RDN (Radian Group Inc.) trades in the Financial Services sector, specifically Insurance - Specialty, with a market capitalization of approximately $4.99B, a trailing P/E of 9.14, a beta of 0.74 versus the broader market, a 52-week range of 31.5-38.84, average daily share volume of 1.2M, a public-listing history dating back to 1992, approximately 1K full-time employees. These structural characteristics shape how RDN stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.74 places RDN roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. The trailing P/E of 9.14 is on the value side, where IV often compresses outside event windows because forward growth expectations are already discounted into the share price. RDN 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 RDN?
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 RDN snapshot
As of June 29, 2026, spot at $37.73, ATM IV 33.10%, IV rank 6.17%, expected move 9.49%. The bull call spread on RDN 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 53-day expiry.
Why this bull call spread structure on RDN specifically: RDN IV at 33.10% is on the cheap side of its 1-year range, which favors premium-buying structures like a RDN bull call spread, with a market-implied 1-standard-deviation move of approximately 9.49% (roughly $3.58 on the underlying). The 53-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated RDN expiries trade a higher absolute premium for lower per-day decay. Position sizing on RDN should anchor to the underlying notional of $37.73 per share and to the trader's directional view on RDN stock.
RDN bull call spread setup
The RDN 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 RDN near $37.73, the first option leg uses a $38.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed RDN chain at a 53-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 RDN shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $38.00 | $1.38 |
| Sell 1 | Call | $40.00 | $1.28 |
RDN bull call spread risk and reward
- Net Premium / Debit
- -$10.00
- Max Profit (per contract)
- $190.00
- Max Loss (per contract)
- -$10.00
- Breakeven(s)
- $38.05
- Risk / Reward Ratio
- 19.000
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.
RDN bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on RDN. 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% | -$10.00 |
| $8.35 | -77.9% | -$10.00 |
| $16.69 | -55.8% | -$10.00 |
| $25.03 | -33.7% | -$10.00 |
| $33.37 | -11.5% | -$10.00 |
| $41.72 | +10.6% | +$190.00 |
| $50.06 | +32.7% | +$190.00 |
| $58.40 | +54.8% | +$190.00 |
| $66.74 | +76.9% | +$190.00 |
| $75.08 | +99.0% | +$190.00 |
When traders use bull call spread on RDN
Bull call spreads on RDN reduce the cost of a bullish RDN stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
RDN thesis for this bull call spread
The market-implied 1-standard-deviation range for RDN extends from approximately $34.15 on the downside to $41.31 on the upside. A RDN bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on RDN, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current RDN IV rank near 6.17% 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 RDN at 33.10%. As a Financial Services name, RDN options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to RDN-specific events.
RDN 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. RDN positions also carry Financial Services sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move RDN alongside the broader basket even when RDN-specific fundamentals are unchanged. Long-premium structures like a bull call spread on RDN 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 RDN chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on RDN?
- A bull call spread on RDN is the bull call spread strategy applied to RDN (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 RDN stock trading near $37.73, the strikes shown on this page are snapped to the nearest listed RDN chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are RDN 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 RDN bull call spread priced from the end-of-day chain at a 30-day expiry (ATM IV 33.10%), the computed maximum profit is $190.00 per contract and the computed maximum loss is -$10.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a RDN bull call spread?
- The breakeven for the RDN bull call spread priced on this page is roughly $38.05 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 RDN market-implied 1-standard-deviation expected move is approximately 9.49%; 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 RDN?
- Bull call spreads on RDN reduce the cost of a bullish RDN 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 RDN implied volatility affect this bull call spread?
- RDN ATM IV is at 33.10% with IV rank near 6.17%, 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.