“Secure a 8.3% Annualized Return by Agreeing to Buy Mettler-Toledo International at $940 Through Options”

Published On: May 6, 2025 1:16 am

Analyzing Mettler-Toledo’s Put Options for Strategic Investors

Investors eyeing shares of Mettler-Toledo International, Inc. (Symbol: MTD), currently priced at $1102.14 each, may find selling puts to be a viable alternative. Specifically, the December put option at the $940 strike presents an intriguing opportunity, with a current bid of $48.70. By selling this option, investors would collect that premium, resulting in a 5.2% return based on the $940 strike, or an annualized return of 8.3%.

However, it’s crucial to understand the nature of selling a put. While it offers a chance to earn premiums, it does not provide exposure to MTD’s potential upside like owning shares would. The put seller only acquires shares if the contract is exercised. For the exercise to be beneficial, the share price would need to drop by 15.6%, making the cost basis approximately $891.30 per share (subtracting the $48.70 premium from $940). Thus, unless this scenario unfolds, the gain for the put seller remains strictly the premium collected.

The chart below illustrates the trailing twelve-month trading history for Mettler-Toledo International, Inc. Notably, the green area indicates where the $940 strike sits in relation to past performance:

Mettler-Toledo Trading History

This chart, along with Mettler-Toledo’s historical volatility, can guide investors in assessing whether selling the December put option at the $940 strike for an 8.3% annualized yield aligns with their risk tolerance. The trailing twelve-month volatility for Mettler-Toledo, calculated from the last 249 trading day closings alongside the current price, stands at 36%. Those interested in exploring additional put options with varying expirations can check the MTD Options page.

During mid-afternoon trading on Monday, the S&P 500 saw put volume of 810,250 contracts, balancing with call volume at the same level. This results in a put-to-call ratio of 0.72, which is elevated compared to the long-term median ratio of 0.65. In essence, compared to the historical data, there are currently more put buyers than anticipated in the options market.

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