Speculative Trade UPDATE - Intuitive Surgical (ISRG)

As you know, we took an options strangle position with a long bias in Intuitive Surgical last week - just ahead of its earnings report. We call a spade a spade, and we admit that we made a mistake in using November expiration instead of December. A large portion of the premium disappeared immediately after the report as both our options were out of the money.

The stock is extremely volatile though, and we still believe we have a chance to recover a good portion of capital from the short hedge portion of the position in the near term. A combination of weak-signaling economic data and a less than enthusiastic report from Intuitive, in the eyes of its investors both long and short, have driven the shares lower. We believe the bottom is about to fall out even further, and that the shares may soon test the low $90s again. We will keep you updated of any changes in our holdings, so stay tuned. (disclosure)