Chipotle options traders deploy $8 million in bearish bets

Options traders placed $8 million in bets against Chipotle on Tuesday. The trading volume for the company's options reached more than eight times its monthly average. Most of that activity involved put contracts, which profit when a stock price falls. Traders executed 240,000 put contracts compared to fewer than 17,000 call contracts.

A large portion of that spending came from one specific trade. An investor bought back 56,000 put options with a strike price of $25 expiring on Nov. 6. That transaction cost at least $2 million. At the same time, that investor sold 56,000 put options with a strike price of $22.5 expiring in mid-December. This maneuver suggests a strategy to allow the stock to drop further over a longer period.

Another trader made a direct bearish wager around 11:30 a.m. Eastern Time. That party purchased 7,500 put options with a strike price of $28 expiring on Nov. 20. The position required a total cost of $1.1 million. For that bet to pay off, Chipotle shares would need to fall another 5% over the next three and a half weeks.

Jason DeLorenzo, founder of the options platform Volland, noted that these positions appear to be earnings plays. He stated that customer data generally pointed to a bearish stance. DeLorenzo added that the last time Chipotle implied a move this small before earnings was in July 2025. He said the stock fell sharply after that report.

Technical analysts are watching the $27 price level closely. That figure marks the shoulder line of a head and shoulders pattern that has formed since January 2021. A break below that ridge line is often viewed by technicians as a signal of further price declines. Chipotle reports its earnings after the market close on Wednesday.