Chipotle options activity spikes on bearish bets ahead of earnings

The release of quarterly earnings for major corporations like Microsoft, Google, T-Mobile, and Ford is scheduled for October 28, but options traders are displaying greater anxiety over Chipotle Mexican Grill.

Trading volume for the restaurant chain surged on Tuesday, running more than eight times its monthly average. The activity was heavily skewed toward bearish positions, with approximately 240,000 puts changing hands. In contrast, fewer than 17,000 calls were traded during the same period.

Roughly $8 million in premiums flowed into these put contracts. A single trader accounted for at least $2 million of that amount by buying back 56,000 puts with a $25 strike price expiring on November 6. These contracts appear to have been sold earlier by the same individual. Simultaneously, that trader sold 56,000 puts with a $22.50 strike price expiring in mid-December.

This maneuver, known as a roll, moves the position to a lower strike price and a later expiration date. Such a shift often signals weakening confidence, particularly as Chipotle shares approach the original strike price. The new position allows for further downside movement in the stock.

Another trader made a more direct bearish wager around 11:30 a.m. Eastern time. That individual purchased 7,500 puts with a $28 strike price expiring on November 20. The cost of this bet was $1.1 million, and it will only yield a profit if Chipotle shares drop another 5% in the following three and a half weeks.

Jason DeLorenzo, founder of the options positioning platform Volland, characterized the activity as earnings plays driven by bearish sentiment. He noted that his data shows customers generally expect the stock to fall. DeLorenzo also pointed to historical patterns, stating that the last time Chipotle's implied move before earnings was this low was in July 2025, a period when the stock declined sharply.

Technical analysts are monitoring the $27 price level. This figure marks the shoulder line of a head and shoulders pattern that has formed since January 2021. Traders often view a break below this line as a bearish signal. The next scheduled data point is the company's earnings report on October 28.