MASI Plummets 13%: Earnings Beat Ignites Volatility as Options Market Signals Turbulence

Summary
• Masimo (MASI) plunges 13.18% intraday to $142.28, erasing $21.61 from its value in under 6 hours.
• Q2 earnings beat estimates with $1.33 adjusted EPS, yet shares trade 2.7% lower post-hours.
• Options chain surges with 20 active contracts, including MASI20250815P135 (135-strike put) seeing 1,422 turnover.

Today’s selloff in Masimo defies conventional logic: a strong earnings report and tariff mitigation guidance failed to arrest a 13% intraday collapse. The stock’s sharp decline, coupled with explosive options activity, signals a market grappling with conflicting signals—optimism over near-term guidance versus skepticism about long-term sustainability. With turnover hitting 5.43% of float and Bollinger Bands widening, volatility is the new norm.

Earnings Beat and Tariff Mitigation Fail to Stem Sharp Selloff
Masimo’s Q2 results—$1.33 adjusted EPS (up 8.1% vs. estimates) and $370.9M revenue (7.9% YoY growth)—were technically strong, yet the stock cratered. The disconnect stems from two factors: 1) profit-taking after a 7.9% revenue uptick, and 2) lingering doubts about the company’s ability to sustain its 30-36% EPS growth guidance. Management’s claim of 50% lower tariff impact than initially feared failed to reassure investors, who are now pricing in potential regulatory headwinds in key markets. The intraday low of $135.83 suggests a breakdown in short-term momentum, with RSI at 55.12 and MACD (-1.11) indicating bearish divergence.

Medical Devices Sector Mixed as MDT Trails S&P 500
Options Playbook: High-Leverage Puts and Volatility-Driven Strategy
• Technical Indicators: 200D MA at $164.62 (above current price), RSI at 55.12 (neutral), MACD -1.11 (bearish), Bollinger Bands widening (Upper: $168.14, Lower: $152.17).
• Key Levels: Immediate support at $153.79 (30D support), critical resistance at $168.06 (200D MA).

Top Options Contracts:
• MASI20250815P135 (Put, $135 strike, 8/15 expiry):
- IV: 54.35% (elevated)
- LVR: 71.36% (high leverage)
- Delta: -0.2495 (moderate sensitivity)
- Theta: -0.0451 (moderate time decay)
- Gamma: 0.0247 (responsive to price swings)
- Turnover: 1,422 (liquid)
- Payoff at 5% downside: $135.83 → $9.17 gain per contract. This put offers asymmetric upside in a volatile environment, with high leverage amplifying gains if the selloff accelerates.

• MASI20250919P135 (Put, $135 strike, 9/19 expiry):
- IV: 44.73% (moderate)
- LVR: 27.98% (balanced leverage)
- Delta: -0.3207 (higher sensitivity)
- Theta: -0.0414 (moderate decay)
- Gamma: 0.01597 (moderate responsiveness)
- Turnover: 2,719 (high liquidity)
- Payoff at 5% downside: $135.83 → $9.17 gain. This longer-dated put provides more time for the selloff to materialize, with lower IV reducing decay risk.

ETF Angle: No leveraged ETFs directly tied to MASI, but the broader XLV (Health Care Select Sector SPDR) at -0.39% offers sector context. Aggressive bulls may consider MASI20250815C135 (call, 135-strike) if the stock retests $152.17 (lower Bollinger Band) with volume above 3M.

Backtest Masimo Stock Performance
After a -13% intraday plunge, MASI has historically shown a positive short-to-medium-term performance. The backtest data reveals that the 3-day win rate is 52.58%, the 10-day win rate is 55.06%, and the 30-day win rate is 57.55%. While the immediate response is negative, the stock tends to recover over time, with an average return of 0.10% over 3 days, 0.41% over 10 days, and 0.21% over 30 days. The maximum return during the backtest period was 0.84%, which occurred on day 59 after the plunge.

Volatility to Persist: Watch $153.79 Support and MDT’s Lead
Masimo’s 13% intraday drop underscores a market torn between near-term optimism and long-term skepticism. While Q2 results were solid, the stock’s breakdown below key moving averages and the surge in put options suggest a bearish bias. Investors should monitor the $153.79 support level (30D support) and the sector leader Medtronic (MDT), which fell 0.39% today. A close below $152.17 (lower Bollinger Band) could trigger a wave of stop-loss orders. For now, the path of least resistance is down, with the options market pricing in a 54.35% implied volatility for the 8/15 puts. Action: Short-term traders should target $135.83 (intraday low) with a stop above $160.15 (middle Bollinger Band).