Options Traders React to Sharp ISRG Stock Pullback

ISRG options are trading at an accelerated clip

Jan 27, 2020 at 2:39 PM
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The shares of Intuitive Surgical, Inc (NASDAQ:ISRG) are trading down 3.5% today at $568.44, extending the sell-off stemming from last Thursday's earnings showing. As of now, ISRG stock is trading below the 80-day moving average for the first time since October, but remains above a trendline that starts at the June low and catches a series of higher lows from August through October. In the meantime, options trading has picked up.

isrg stock jan 27

Calls and puts are both running hot today, trading well above the expected volumes, and leading the way is the weekly 2/7 545-strike put. Traders are possibly selling to open positions here, which would mean they see $545 as a potential floor on the charts. On the call side, the weekly 1/31 590 strike, which expires on Friday, is most popular.

Meanwhile, short interest has been increasing on Intuitive Surgical, up 20.3% in just the last reporting period. The security's short interest ratio comes in at a not-insignificant 3.1, meaning short sellers are holding three days' worth of buying power, based on average trading volumes. More attention from short sellers may be a headwind for ISRG going forward.

Bearish analyst notes, like we're seeing today, certainly won't help either. Specifically, Deutsche Bank downgraded ISRG shares to "hold" from "buy," and dropped its price target to $595 from $610.

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