On Tuesday, Chipotle experienced a surge in options trading, with volumes exceeding eight times the monthly average, predominantly skewed towards put options. Specifically, 240,000 puts were traded compared to fewer than 17,000 calls.
This activity included a significant transaction where a trader bought back 56,000 25-strike puts set to expire on November 6, likely indicating a lack of confidence as the stock approaches this strike price.
Additionally, a bearish bet was placed with the purchase of 7,500 28-strike puts expiring on November 20, representing a $1.1 million wager that Chipotle's stock will decline by 5% in the coming weeks. Jason DeLorenzo, founder of the options positioning platform Volland, noted that these trades appear to be earnings plays, reflecting a generally bearish outlook from customers.
Technically, the $27 level is critical, as it represents a shoulder line in a head and shoulders pattern dating back to January 2021, and a break below this level could signal further bearish momentum. DeLorenzo also pointed out that the last time Chipotle's implied move before earnings was this low was in July 2025, which resulted in a significant drop in the stock's price