WMS Bull Call Spread Strategy
WMS (Advanced Drainage Systems, Inc.), in the Industrials sector, (Construction industry), listed on NYSE.
Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products, and drainage solutions for use in the underground construction and infrastructure marketplace in the United States, Canada, Mexico, and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems, EZflow synthetic aggregate bundles, mechanical aeration wastewater solutions, septic tanks and accessories, and combined treatment and dispersal systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. It offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of approximately 38 distribution centers. The company was incorporated in 1966 and is headquartered in Hilliard, Ohio.
WMS (Advanced Drainage Systems, Inc.) trades in the Industrials sector, specifically Construction, with a market capitalization of approximately $10.74B, a trailing P/E of 22.78, a beta of 1.33 versus the broader market, a 52-week range of 104.69-179.315, average daily share volume of 867K, a public-listing history dating back to 2014, approximately 6K full-time employees. These structural characteristics shape how WMS stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.33 indicates WMS has historically moved more than the broader market, amplifying both the directional payoff and the realized volatility relative to an index-equivalent position. WMS 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 WMS?
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 WMS snapshot
As of May 15, 2026, spot at $135.95, ATM IV 51.50%, IV rank 47.31%, expected move 14.76%. The bull call spread on WMS 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 WMS specifically: WMS IV at 51.50% 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 14.76% (roughly $20.07 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 WMS expiries trade a higher absolute premium for lower per-day decay. Position sizing on WMS should anchor to the underlying notional of $135.95 per share and to the trader's directional view on WMS stock.
WMS bull call spread setup
The WMS 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 WMS near $135.95, the first option leg uses a $135.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed WMS 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 WMS shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $135.00 | $10.10 |
| Sell 1 | Call | $145.00 | $5.70 |
WMS bull call spread risk and reward
- Net Premium / Debit
- -$440.00
- Max Profit (per contract)
- $560.00
- Max Loss (per contract)
- -$440.00
- Breakeven(s)
- $139.40
- Risk / Reward Ratio
- 1.273
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.
WMS bull call spread payoff curve
Modeled P&L at expiration across a range of underlying prices for the bull call spread on WMS. 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% | -$440.00 |
| $30.07 | -77.9% | -$440.00 |
| $60.13 | -55.8% | -$440.00 |
| $90.18 | -33.7% | -$440.00 |
| $120.24 | -11.6% | -$440.00 |
| $150.30 | +10.6% | +$560.00 |
| $180.36 | +32.7% | +$560.00 |
| $210.42 | +54.8% | +$560.00 |
| $240.48 | +76.9% | +$560.00 |
| $270.53 | +99.0% | +$560.00 |
When traders use bull call spread on WMS
Bull call spreads on WMS reduce the cost of a bullish WMS stock position by selling a higher-strike call; suited to moderate-move theses where price reaches but does not vastly exceed the short strike.
WMS thesis for this bull call spread
The market-implied 1-standard-deviation range for WMS extends from approximately $115.88 on the downside to $156.02 on the upside. A WMS bull call spread caps both the risk and the reward of a bullish position; relative to an outright long call on WMS, the spread reduces the cost basis but limits the maximum profit to the strike width minus net debit. Current WMS IV rank near 47.31% is mid-range against its 1-year distribution, so the IV signal is neutral; the bull call spread thesis on WMS should anchor more to the directional view and the expected-move geometry. As a Industrials name, WMS options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to WMS-specific events.
WMS 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. WMS positions also carry Industrials sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move WMS alongside the broader basket even when WMS-specific fundamentals are unchanged. Long-premium structures like a bull call spread on WMS 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 WMS chain quotes before placing a trade.
Frequently asked questions
- What is a bull call spread on WMS?
- A bull call spread on WMS is the bull call spread strategy applied to WMS (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 WMS stock trading near $135.95, the strikes shown on this page are snapped to the nearest listed WMS chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are WMS 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 WMS bull call spread priced from the end-of-day chain at a 30-day expiry (ATM IV 51.50%), the computed maximum profit is $560.00 per contract and the computed maximum loss is -$440.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WMS bull call spread?
- The breakeven for the WMS bull call spread priced on this page is roughly $139.40 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 WMS market-implied 1-standard-deviation expected move is approximately 14.76%; 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 WMS?
- Bull call spreads on WMS reduce the cost of a bullish WMS 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 WMS implied volatility affect this bull call spread?
- WMS ATM IV is at 51.50% with IV rank near 47.31%, 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.