Unusual Volume in Edwards Lifesciences Put Options Shows Investors Bullish on EW Stock

An unusually high volume of out-of-the-money (OTM) put options in Edwards Lifesciences (EW), which makes heart valve replacement products, shows investors are bullish on EW stock over the next three months. Moreover, EW is below analysts' price targets. EW is up slightly at $90.78 in midday trading today. It has rebounded significantly since bottoming out right after its July 23 Q2 earnings release. EW hit a recent low of $82.63 on July 24. More News from Barchart - Despite Impressive Results, Nvidia Stock May Be Stuck in a Range - What's the Best Play? - Micron Technology Stock Finally Looks Like a Contrarian Opportunity This may have been a familiar case of "sell on the news." In fact, Edwards Lifesciences produced strong earnings, and management raised its earnings per share (EPS) guidance for 2026. In fact, EW is still trading well below its average forward price/earnings ratio (see below). That makes today's unusual OTM put volume a signal that investors are likely bullish on EW. Unusual Put Options Volume This can be seen in today's Barchart Unusual Stock Options Activity Report. Puts expiring in 81 days on Nov. 20 have been traded in over 25 times the volume of the prior number of contracts outstanding. There have been almost 2,700 put contracts traded at the $77.50 put strike price, which is almost 15% below today's price (i.e., -14.6% out-of-the-money). Moreover, the premium is still high at 90 cents despite that low strike and extended time period. That means that an investor(s) who shorted these puts, after posting $7,750 in collateral per contract, immediately receives $90. This works out to a 1.16% yield for the next three months. More importantly, the breakeven potential buy-in point is $76.60 (i.e., 15.6% lower than today's price). But that only occurs if EW stock drops to $77.50 on or before Nov. 20. This is even lower than EW's low point on July 24. The point is that this is a very conservative way for an investor to set a value buy-in point and get paid while waiting. Often, when this occurs, it's a sign that an existing investor is looking to lower their average cost and still make income on their existing holdings. They may believe that EW stock could be undervalued here. Here's why. Higher EW Price Targets Edwards Lifesciences' Q2 revenue was up 13.6% YoY. That was higher than analysts' expectations, according to Seeking Alpha. Moreover, the company posted adj. EPS of 78 cents, up 16.4% from last year's adj. EPS of 67 cents.