Masimo Corp. Options Trading Offers New Opportunities for Investors

Investors looking at Masimo Corp. (Symbol: MASI) have new options to consider, with contracts set to expire in June 2025 now available. With 242 days until expiration, these new contracts may allow sellers of puts or calls to earn higher premiums compared to those with shorter time frames. Stock Options Channel’s YieldBoost formula has identified a noteworthy put and call contract from the MASI options chain.

Put Option Insights: Favorable Entry Point

The put contract at a $140.00 strike price currently has a bid of $13.10. By selling this put option, an investor agrees to buy shares at $140.00 while also collecting the premium. This brings the effective cost per share to $126.90, which is a compelling alternative to purchasing shares directly at today’s price of $144.20.

Because the $140.00 strike price is about 3% lower than the current trading price, the possibility exists that this put option may expire worthless. Current analytical data estimates a 64% chance of this occurring. Stock Options Channel will monitor and publish these odds over time along with corresponding charts. If the contract does expire worthless, the premium translates to a 9.36% return on the cash commitment, or an annualized return of 14.11%, known as the YieldBoost.

Call Option Analysis: Potential for Significant Returns

On the calls side, the contract at a $155.00 strike price has a current bid of $14.20. If an investor buys MASI shares at the current price of $144.20 and sells this call option as a “covered call,” they commit to selling at $155.00. Including the premium collected, this strategy could yield a total return of 17.34% if the stock is called away at expiration in June 2025 (excluding any broker commissions).

However, there is a risk of potentially losing out on further gains if MASI’s share price rises significantly. Examining the past trading history and business fundamentals of Masimo Corp. is crucial. The chart below illustrates MASI’s trading performance over the last year, highlighting the $155.00 strike price in red:

Selling the call at $155.00 represents a roughly 7% premium to the current trading price, meaning there is also a chance that this contract could expire worthless. If that happens, the investor keeps both the shares and the premium. Current data gives a 49% likelihood of this outcome. Stock Options Channel will continue to track these shifting odds and offer historical data on the contract’s performance. If the covered call expires worthless, it would generate a 9.85% additional return for the investor, or 14.85% annualized, also referred to as the YieldBoost.

Volatility Insights

The implied volatility for the put option is 42%, while the call option shows 39%. Our analysis of the last 250 trading days, along with today’s share price of $144.20, reveals a trailing twelve-month volatility of 38%. For more contract ideas related to put and call options, be sure to visit StockOptionsChannel.com.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.