New Options Launch for Chipotle Mexican Grill Offers Investor Insights

Investors in Chipotle Mexican Grill Inc (Symbol: CMG) gained access to new options today, with a focus on the contracts set to expire on May 30th. An analysis from Stock Options Channel highlights one put and one call contract that may be of particular interest to investors.

Put Contract Analysis

The put contract with a strike price of $47.00 has a current bid of $1.99. If an investor opts to sell-to-open this put contract, they will commit to purchasing shares of Chipotle at $47.00. Furthermore, they will collect the premium, reducing their effective cost basis to $45.01 (excluding broker commissions). For those already looking to invest in CMG, this option may present an appealing alternative to the current share price of $49.76.

This $47.00 strike price reflects approximately a 6% discount from the current trading price, categorizing it as out-of-the-money. Current analytical data suggest a 67% probability that this put contract could expire worthless. Stock Options Channel plans to monitor these odds over time, providing ongoing updates on their site, including a detailed chart. Should this contract expire without value, the premium could yield a 4.23% return on the cash commitment, translating to an annualized return of 30.91%, referred to as the YieldBoost.

Trading History Chart

Below is a chart showcasing Chipotle Mexican Grill Inc’s trailing twelve-month trading history, pinpointing the $47.00 strike in green:

Call Contract Overview

On the opposite end of the options chain, a call contract priced at $51.00 has a current bid of $1.48. If an investor buys shares of CMG at the present price of $49.76 and sells-to-open this call contract as a “covered call,” they agree to sell their shares at $51.00. Including the premium, this results in a total return of 5.47% if the stock is called away by the May 30th expiration (excluding dividends and broker commissions). However, substantial upside potential may remain untapped if CMG shares increase significantly in value; therefore, analyzing the past twelve months of trading data and business fundamentals is crucial.

Below is a chart illustrating CMG’s trailing twelve-month trading history, with the $51.00 strike highlighted in red:

The $51.00 strike represents about a 2% premium over the current trading price, categorizing it as out-of-the-money. There is a possibility that the covered call contract might also expire worthless, allowing the investor to retain both their shares and the collected premium. Current analytical data indicate a 52% likelihood that this will occur. Ongoing tracking of these probabilities, alongside the trading history of the option contract, will be available on our website. If the covered call expires without value, the premium would equate to a 2.97% increase in return for the investor, or 21.71% annualized—the second YieldBoost.

Volatility Insights

The implied volatility for the put contract is currently 51%, while that for the call contract is at 40%. In contrast, the actual trailing twelve-month volatility, calculated from the last 251 trading days and today’s price of $49.76, is assessed at 34%. For additional put and call options contract opportunities, visit StockOptionsChannel.com.

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The views and opinions expressed herein are the author’s and do not necessarily reflect those of Nasdaq, Inc.