WMS Cash-Secured Put Strategy
WMS (Advanced Drainage Systems, Inc.), in the Industrials sector, (Construction industry), listed on NYSE.
Advanced Drainage Systems, Inc., established in Hilliard, Ohio in 1966, is a leading provider of innovative water management solutions. The company specializes in the design, manufacturing, and global distribution of thermoplastic corrugated pipes and related drainage products, primarily targeting the underground construction and infrastructure sectors across the United States, Canada, Mexico, and other international territories. Its operations are structured across four key segments: Pipe, International, Infiltrator, and Allied Products & Other. ADS offers a wide array of products, including single, double, and triple-wall corrugated pipes made from polypropylene and polyethylene. Beyond basic piping, their extensive catalog features sophisticated water management systems such as plastic leachfield chambers, EZflow synthetic aggregate bundles, advanced mechanical aeration wastewater solutions, septic tanks and accessories, and integrated treatment and dispersal units. Furthermore, the company supplies allied products like storm retention, detention, and septic chambers, polyvinyl chloride drainage structures, various fittings, and water quality filters and separators.
WMS (Advanced Drainage Systems, Inc.) trades in the Industrials sector, specifically Construction, with a market capitalization of approximately $10.77B, a trailing P/E of 23.84, a beta of 1.29 versus the broader market, a 52-week range of 128.03-179.315, average daily share volume of 887K, 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 1.29 places WMS roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. WMS 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 WMS?
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.
WMS snapshot
As of August 14, 2026, spot at $149.89, ATM IV 34.80%, IV rank 20.07%, expected move 9.98%. The cash-secured put on WMS below is built from the August 14, 2026 end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 35-day expiry.
Why this cash-secured put structure on WMS specifically: WMS IV at 34.80% is on the cheap side of its 1-year range, which means a premium-selling WMS cash-secured put collects less credit per unit of strike-width risk, with a market-implied 1-standard-deviation move of approximately 9.98% (roughly $14.95 on the underlying). The 35-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 $149.89 per share and to the trader's directional view on WMS stock.
WMS cash-secured put setup
The WMS cash-secured put below is built from the August 14, 2026 end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With WMS at $149.89 on that close, the first option leg uses a $140.00 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 35-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) |
|---|---|---|---|
| Sell 1 | Put | $140.00 | $3.08 |
WMS cash-secured put risk and reward
- Net Premium / Debit
- +$307.50
- Max Profit (per contract)
- $307.50
- Max Loss (per contract)
- -$13,691.50
- Breakeven(s)
- $136.93
- Risk / Reward Ratio
- 0.022
Max profit equals premium times 100; max loss equals strike minus premium times 100 (at zero, assuming assignment). Breakeven is strike minus premium.
WMS cash-secured put payoff curve
Modeled P&L at expiration across a range of underlying prices for the cash-secured put 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% | -$13,691.50 |
| $33.15 | -77.9% | -$10,377.46 |
| $66.29 | -55.8% | -$7,063.42 |
| $99.43 | -33.7% | -$3,749.38 |
| $132.57 | -11.6% | -$435.34 |
| $165.71 | +10.6% | +$307.50 |
| $198.85 | +32.7% | +$307.50 |
| $231.99 | +54.8% | +$307.50 |
| $265.13 | +76.9% | +$307.50 |
| $298.27 | +99.0% | +$307.50 |
When traders use cash-secured put on WMS
Cash-secured puts on WMS earn premium while a trader waits to acquire WMS stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning WMS.
WMS thesis for this cash-secured put
The market-implied 1-standard-deviation range for WMS extends from approximately $134.94 on the downside to $164.84 on the upside. A WMS cash-secured put lets a trader earn premium while waiting to acquire WMS 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 WMS IV rank near 20.07% 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 WMS at 34.80%. 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 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. 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. Short-premium structures like a cash-secured put on WMS carry tail risk when realized volatility exceeds the implied move; review historical WMS earnings reactions and macro stress periods before sizing. Always rebuild the position from current WMS chain quotes before placing a trade.
Frequently asked questions
- What is a cash-secured put on WMS?
- A cash-secured put on WMS is the cash-secured put strategy applied to WMS (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 WMS stock at $149.89 on the August 14, 2026 close, the strikes shown on this page are snapped to the nearest listed WMS chain strike and the premiums come straight from that session's bid/ask midpoint.
- How are WMS 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 WMS cash-secured put priced from the August 14, 2026 end-of-day chain at a 30-day expiry (ATM IV 34.80%), the computed maximum profit is $307.50 per contract and the computed maximum loss is -$13,691.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a WMS cash-secured put?
- The breakeven for the WMS cash-secured put priced on this page is roughly $136.93 at expiration, derived from the August 14, 2026 end-of-day chain's premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The WMS market-implied 1-standard-deviation expected move in the same options snapshot is approximately 9.98%; 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 WMS?
- Cash-secured puts on WMS earn premium while a trader waits to acquire WMS stock at a target strike below the current quote; most attractive when IV is rich and the trader is comfortable owning WMS.
- How does current WMS implied volatility affect this cash-secured put?
- WMS ATM IV is at 34.80% with IV rank near 20.07%, 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.