Traders are betting big against this restaurant giant into earnings

There are a lot of big earnings after today's close, including Microsoft, Google, T-Mobile and Ford. But it's one fast food giant that apparently has options traders most worried: Chipotle.

Options trading exploded in Chipotle Tuesday on volume more than eight times its monthly average and skewed heavily towards puts, with 240,000 puts trading versus under 17,000 calls.

Of the $8 million in put premiums, at least $2 million of it came from someone buying back 56,000 25-strike puts for Nov. 6 expiry that they had likely sold, while simultaneously selling the same number of 22.5-strike puts expiring mid-December, arguably on the margin an indication of weakening confidence as CMG's nears the trader's first strike and forces a roll down in price and out in time to give room for the stock to slip further.

Separately, there was another outright bearish bet: around 11:30 a.m. E.T, someone bought 7,500 28-strike puts expiring Nov. 20, a $1.1 million bet that needs Chipotle to drop another 5% the next 3.5 weeks.

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

The $27 level is an interesting one from a technical perspective. It the shoulder line of a large head and shoulders pattern that goes back to January of 2021. Technicians often view a break below a ridge line as bearish price action.

"The last time Chipotle implied move before earnings was this low was July 2025 and the stock got crushed," DeLorenzo added.