ResMed [RMD]
criteria.md| item | value |
|---|---|
| Vehicle | Common equity, RMD |
| Ladder position | 1 — the default |
| Implied vol minus trailing realised vol | +8.3 points — IV 35.81% (RMD270115C00200000, $200 strike, 2027-01-15, measured 2026-07-30) against trailing 252-day realised 27.50% |
| Quoted size at the strike | $200 Jan-2027 call: bid $24.11 × 10, ask $26.62 × 30. Spread $2.51 = 9.9% of mid. Open interest 82 contracts across the whole strike |
| Argument for anything above equity | None offered, therefore equity |
Why not the LEAP. The 12-month-plus expiry is available and the thesis horizon is 5 years, so a LEAP is at least horizon-appropriate — but it costs a measured 8.3 points of implied-over-realised vol, paid twice over a two-year hold, and the January-2027 chain quotes a 9.9% bid-ask on 82 contracts of open interest at the money. Consistent with every chain pulled in this project on 2026-07-29 (five large-software names at an 11–15 point premium; CRDO at 108% vs 90.7%). The thesis here is a multiple re-rating from the 7.4th percentile plus 9% compounding, which is a slow, non-convex payoff — the worst possible profile to buy theta against. Equity captures all of it.
| Entry | Market. Spot $206.91; no catalyst-driven entry timing argued |
| Thesis horizon | 5 years (the implied-path test horizon), with the 12-month target as the interim check |
| 12-month target | $237 (+14.8%) |
| Invalidation | Devices revenue growth turns negative on a same-quarter YoY basis for two consecutive quarters. Currently +8.8% (Q3 FY26) and +8.7% (9M FY26). This is the only line where the GLP-1 bear case can appear first, and it is disclosed quarterly in the 10-Q revenue-disaggregation note |
| Second invalidation | Mask/consumable growth falls below device growth for two consecutive quarters — the annuity thesis breaking |
| Sizing input | Trailing 252-day vol 27.5% — the lowest of the three names in this cluster (UFPT 47.2%, USPH 42.1%). Inverse-vol sizing gives RMD the largest of the three slots. Beta 0.775 |
$30.0bn market cap, large-cap NYSE listing. PASS for any size this book would take. Size constrains nothing here.
An oral-GLP-1 OSA regulatory decision with a published PDUFA-equivalent date falling inside a liquid expiry would make a defined-risk put spread arguable as a hedge rather than an expression. No such date is disclosed by RMD or verifiable from its filings, so no such structure is proposed. A fabricated catalyst date is worse than an absent one.