To The Moon

$Intuitive Surgical(ISRG)$ is a leading company in the medical instruments and supplies industry, renowned for its da Vinci robotic surgery systems. As of January 22, 2025, ISRG's stock is trading at $604.12.

The company is scheduled to release its earnings report on January 23, 2025.

In the third quarter of 2024, Intuitive Surgical reported a significant 18% increase in procedures performed using its da Vinci systems. This growth led to a corresponding 18% rise in sales of instruments and accessories, totalling $1.26 billion and surpassing expectations. The company also placed 110 da Vinci 5 robots in the third quarter, up from 70 in the second quarter.

Given the upcoming earnings report, here are two options trading strategies to consider:

1. Bull Put Spread (Credit Put Spread):

• Objective: Profit from the stock maintaining its current level or moving higher.

• Strategy: Sell a put option at a higher strike price and buy another put option at a lower strike price within the same expiration period.

• Example:

  Sell a put option with a strike price of $600.

  Buy a put option with a strike price of $590.

• Rationale: If ISRG's stock price remains above $600 by expiration, both options expire worthless, allowing you to keep the net premium received. This strategy benefits from the stock's stability or upward movement.

2. Iron Condor:

• Objective: Profit from low volatility, expecting the stock to trade within a specific range.

• Strategy: Combine a bull put spread with a bear call spread.

• Example:

  Bull Put Spread -

  Sell a put option with a strike price of $600.

  Buy a put option with a strike price of $590.

  Bear Call Spread -

  Sell a call option with a strike price of $610.

  Buy a call option with a strike price of $620.

• Rationale: If ISRG's stock price remains between $600 and $610 by expiration, all options expire worthless, and you retain the net premium. This strategy is effective when anticipating minimal price movement.

Both strategies aim to capitalize on the stock's behaviour leading up to the earnings report. The bull put spread profits from stability or an upward trend, while the iron condor benefits from low volatility, expecting the stock to remain within a defined range. Please DYODD as it is essential to assess the stock's volatility, time to expiration, and your risk tolerance before executing these trades.