Chipotle Earnings
CMG stock is trending bearish
Chipotle Mexican Grill (CMG) declares earnings after market close today. The stock price is trending bearish and the 1-month return is -3.3%. Over 3 months the price is up +15.8% and YTD up +31.47%. So, somewhat of mixed returns.
The Options AI website is projecting a move of ~3.8% post earnings in either direction. That would give a CMG price range post earnings of $1750 to $1900. The last 3 moves have had a average of ~5%. Here are the last 3 moves:
Feb 2 - 3, 2021: -1.51%
Apr 21 - 22, 2021: -1.83%
Jul 20 - 21, 2021: +11.54%
The options premiums are highly elevated with the implied volatility showing about 90% which is very high. Selling options strategy in these situations can generate income.
I will be looking to sell call spreads at around 15% out of the money from current prices. Being so much out of the money the premiums will be low but still good enough for a 2 day trade.