Option update: Yahoo (YHOO), Intuitive Surgical (ISRG) risky into EPS

Intuitive Surgical Inc. (NASDAQ: ISRG) develops, manufactures and markets robotic technologies designed to improve patient returns.

• ISRG is expected to report EPS on 10/18.
• Oppenheimer says: "We believe any competition ISRG faces is at least 7-10 years away. We believe the recent sell-off offers an opportunity. We continue to rate shares Buy and reiterate our $270 price target."
• ISRG October 250 straddle is priced at $30.90. ISRG overall option implied volatility of 80 is above its 26-week average of 48 according to Track Data, suggesting larger price risk.

Yahoo! Inc. (NASDAQ: YHOO) is expected to report EPS of 8 cents 10/16 according to Thomson First Call.

• Alex Brown has a Hold rating and a $24 price target on YHOO.
• Alex Brown says: "We expect YHOO to report 3Q results in-line to slightly below expectations, as US traffic declines of 9% and search volume slowdown may pressure growth."
• YHOO October 27.5 straddle is priced at $2.71. YHOO November option implied volatility of 51 is above its 26-week average of 36 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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