Options Traders Pile Into Bearish Bets on Chipotle Ahead of Earnings

Several of the market's biggest companies report quarterly results after the closing bell on Oct. 28, including Microsoft, Google, T-Mobile and Ford. But it is a restaurant chain, Chipotle, that appears to be making options traders the most nervous.

Options activity in Chipotle jumped on Tuesday, with volume running more than eight times the stock's monthly average. The flow leaned heavily toward bearish positions: about 240,000 puts changed hands, compared with fewer than 17,000 calls.

Roughly $8 million in premiums went into those puts. At least $2 million of that came from a trader who bought back 56,000 puts with a $25 strike expiring Nov. 6, contracts that the trader had likely sold earlier. At the same time, the trader sold the same number of puts with a $22.50 strike expiring in mid-December.

That kind of move, known as a roll, shifts the position to a lower price and a later date. It can be read as a sign of weakening confidence, since Chipotle shares are approaching the original strike and the new position leaves more room for the stock to slip further.

A separate trade was a more outright bearish wager. Around 11:30 a.m. Eastern, someone bought 7,500 puts with a $28 strike expiring Nov. 20. The bet cost $1.1 million and pays off only if Chipotle falls another 5% over the next three and a half weeks.

"All of these look like earnings plays and our data show customers generally bearish," said Jason DeLorenzo, founder and owner of Volland, an options positioning platform.

Chart watchers are also focused on the $27 level. It marks the shoulder line of a large head and shoulders pattern that stretches back to January 2021, and technicians often treat a break below that kind of ridge line as a bearish signal.

DeLorenzo also pointed to history. "The last time Chipotle implied move before earnings was this low was July 2025 and the stock got crushed," he said.