A pulse oximeter measures the percutaneous arterial oxygen saturation (SpO2) by the absorption ratio of two different wavelengths of light that pass through the tissue. Sensor misalignment and incorrect position can cause inaccurate results. Especially in the case of neonates and infants, finger size or sensor location can create a gap between the sensor and finger. This gap may cause light leakage that does not pass through the tissue (“shunted light”). This might be one cause of inaccurate SpO2 measurement. We investigated the effect of shunted light on SpO2 value while displacing the sensor laterally from the center to the outside of the finger. We found that lateral sensor displacement caused shunted light which degrades measurement accuracy. We also found that if the LED or photodiode is firmly attached to the finger and the shunted light is shielded, there were very few errors in the measurement value. We think that sensors which shield the shunted light and fit the finger firmly will improve measurement accuracy in pulse oximetry.