Chipotle Options: Traders Bet Stock Drops After Earnings

Chipotle faces a wall of bearish bets from options traders ahead of its earnings report.

The restaurant chain joins Microsoft, Google, T-Mobile, and Ford in reporting results after the closing bell on Oct. 28. However, Chipotle has drawn the most attention from the derivatives market. Options volume for the stock spiked on Tuesday. Trading activity ran to more than eight times the monthly average.

The flow skewed heavily toward puts. Approximately 240,000 put contracts changed hands. By comparison, fewer than 17,000 call contracts traded. Puts pay off when a stock falls. The total premiums paid for these bearish positions reached roughly $8 million.

One specific trade dominated the volume. A trader bought back 56,000 puts with a $25 strike price expiring on Nov. 6. That action suggests the trader had sold those contracts earlier. Simultaneously, the trader sold the same number of puts with a $22.50 strike expiring in mid-December. This maneuver is known as a roll. It moves the position to a lower price and a later date. Technicians often view such a move as a sign of weakening confidence, especially when shares approach the original strike price.

A separate, outright bearish bet also appeared in the data. Around 11:30 a.m. Eastern, an investor bought 7,500 puts with a $28 strike expiring on Nov. 20. The cost for that position was $1.1 million. The trade only generates profit if Chipotle shares drop another 5% over the next three and a half weeks.

Jason DeLorenzo, founder of the options positioning platform Volland, called the activity earnings plays. "All of these look like earnings plays and our data show customers generally bearish," DeLorenzo said. He noted that the implied move before earnings is currently very low. "The last time Chipotle implied move before earnings was this low was July 2025 and the stock got crushed," he said.

Technical analysts are also watching the $27 price level. That figure marks the shoulder line of a head and shoulders pattern that has been present since January 2021. A break below that ridge line is typically treated as a bearish signal.