Chipotle Earnings: Options Traders Bet Against Stock

Options traders are positioning aggressively against Chipotle ahead of its quarterly earnings release, with bearish bets dwarfing bullish activity in the options market. On Tuesday, trading volume for the restaurant chain reached more than eight times the monthly average. The flow was heavily skewed toward puts, with approximately 240,000 put contracts changing hands compared to fewer than 17,000 call contracts.

The market typically sees major corporate results reported after the closing bell on October 28, including from Microsoft, Google, T-Mobile, and Ford. However, Chipotle is drawing the most attention from derivatives traders. Roughly $8 million in premiums went into the put contracts. A single trader accounted for at least $2 million of that total by buying back 56,000 puts with a $25 strike price expiring on November 6. This trader had likely sold those contracts earlier in the cycle.

Simultaneously, the same trader sold 56,000 puts with a $22.50 strike price expiring in mid-December. This maneuver, known as a roll, shifts the position to a lower strike price and a later expiration date. Analysts interpret this move as a sign of weakening confidence. It allows the stock to slip further before the new position incurs a loss, given that Chipotle shares are currently approaching the original $25 strike level.

Another distinct trade placed a more direct bet on a decline. At approximately 11:30 a.m. Eastern, a trader purchased 7,500 puts with a $28 strike price expiring on November 20. The position cost $1.1 million and will profit only if Chipotle shares fall another 5% over the next three and a half weeks. Jason DeLorenzo, founder and owner of the options positioning platform Volland, stated that the data shows customers are generally bearish and that these positions appear to be earnings plays.

Technical analysts are watching the $27 price level closely. This figure marks the shoulder line of a head and shoulders chart pattern that has been in place since January 2021. A break below this line is often treated as a bearish signal. DeLorenzo noted that the last time Chipotle had such low implied volatility before an earnings report was in July 2025. He added that the stock declined sharply following that previous earnings release.

Chipotle will report its quarterly results after the market closes on October 28. The current options activity suggests that traders are preparing for a volatile reaction to the numbers. The specific strikes and expiration dates indicate that many investors expect the stock to move lower in the weeks following the announcement.