Restaurant concern Chipotle Mexican Grill, Inc. (NYSE:CMG) is up 0.4% at $1,860.50 this afternoon, just ahead of its third-quarter earnings report, due out after the close on Thursday, Oct. 21. Below we will take a look at how CMG has been faring on the charts, and see what the options market is pricing in for the stock ahead of the event. 

The last time we checked on Chipotle stock, it had just landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks to avoid in October. For most of the month, CMG has consolidated below the $1,880 level, which coincides with the formerly supportive 40-day moving average. Month-over-month, CMG is down 2.5%, though it still sports a 34.1% year-to-date lead. 

In terms of the company's earnings history, CMG has suffered negative next-day returns during all but two of the past eight quarters, averaging a 5.7% swing, regardless of direction. This quarter, the options market looks to be eyeing a slightly higher post-earnings shift, pricing in a 6.7% move.

An unwinding of optimism in the options pits could put pressure on the shares, as near-term traders are much more call-biased than usual at the moment. This is per Chipotle stock's Schaeffer's put/call open interest ratio (SOIR), which ranks in the 6th percentile of its annual range.

What's more, analysts are mostly bullish on CMG, which could spark a shift in sentiment among the brokerage bunch. Of the 25 in coverage, 16 consider Chipotle stock a "buy" or better. 

While the shares of Crowdstrike Holdings Inc (NASDAQ:CRWD) are cooling off after yesterday's attempt to topple the stock's recent Aug. 30 peak at $289.24. The stock was last seen down 0.7% at $283.12, though there's reason to believe CRWD could keep adding to its already impressive 94.5% year-over-year lead, and notch a fresh record high in the process. 

According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, CRWD's proximity to its record high comes amid historically low implied volatility (IV). This has been a bullish combination for the security in the past. In fact, White's study illustrates four other times in the past five years when the equity was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) stood in the 20th percentile of its annual range or lower. This is currently the case with CRWD's SVI of 36%, which sits in its 3rd annual percentile.

After three of these signals, the equity enjoyed a positive one-month return, averaging an 11.1% pop. A similar move from its current perch would put CRWD at a fresh record of $314.55. 

The equity still has plenty of underlying support as well. Last month, we covered the bullish implications of the 80-day moving average, while the 120-day trendline quickly stepped in as a floor for a brief pullback earlier in October. 

Analysts are plenty bullish on Crowdstrike stock. Of the 20 in coverage, 19 consider it a "buy" or better. Plus, the 12-month consensus price target of $310.48 is a 9.2% premium to current levels. 

Now looks like the perfect time to speculate on CRWD's next move with options, too. As we mentioned before, Crowdstrike's SVI stands in the extremely low 3rd percentile, indicating that options traders are pricing in relatively low volatility expectations at the moment. What's more, the security's Schaeffer's Volatility Scorecard (SVS) ranks at 85 out of a possible 100. This indicates that the stock tends to outperform these expectations -- a good thing for buyers. 

The shares of Alibaba Group Holding Ltd (NYSE:BABA) are up 3.5% at $172.73 this morning, after the China-based tech company's latest chip launch. This processor, called the Yitian 710, will be used in the firm's Panjiu servers, and will not be available for use outside of Alibaba. The announcement comes as cloud computing players have been urged by the Chinese government to invest in the nation's chip sector, which is still behind that of other countries.

The stock remains down 25.8% year-to-date, but looks to have found its bottom near the $139 level, which helped contain some of BABA's pullback in 2018. The equity has now overcome recent pressure at the 60-day moving average, however, as well as a short-term ceiling at the $170 mark. For the month, BABA sports a 16.7% lead. 

The equity is brushing off a price-target cut from Atlantic Equities, too, after the analyst slashed its price objective to $250 from $290. The 12-month consensus price target of $243.31 still represents a 40.7% premium to current levels, though. Plus, just one of the 14 analysts in coverage consider BABA a "hold," while the remaining 13 call it a "buy" or better. 

Options traders are singing a different tune. This is per the equity's Schaeffer's put/call open interest ratio (SOIR), which stands in the 80th percentile of its 12-month range. A SOIR this high means short-term options traders have rarerly been more put-biased in the past year. 

The following corporate earnings announcements are expected today, October 19:

The Bank of New York Mellon Corp. (NYSE:ACI -- $57.41) provides a range of financial products and services in the United States and internationally. The Bank of New York Mellon will report its Q3 earnings of 2021 before the bell today.

Commerce Bancshares Inc. (NASDAQ:CBSH -- $71.60) operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States. Commerce Bancshares will report its Q3 earnings of 2021 before the bell today.

Dover Corp. (NYSE:DOV -- $166.79) provides equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services worldwide. Dover will report its Q3 earnings of 2021 before the bell today.

Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC -- $12.21) provides communication infrastructure, services, and software solutions to the telecom and other sectors. Ericsson will report its Q3 earnings of 2021 before the bell today.

Fifth Third Bancorp (NASDAQ:FITB -- $44.05) is a diversified financial services company headquartered in Cincinnati, Ohio, and the indirect parent company of Fifth Third Bank, National Association, a federally chartered institution. Fifth Third will report its Q3 earnings of 2021 before the bell today.

First Midwest Bancorp Inc. (NASDAQ:FMBI -- $19.28) operates as the bank holding company for First Midwest Bank that provides various banking products and services. First Midwest Bancorp will report its Q3 earnings of 2021 before the bell today.

Halliburton Co. (NYSE:HAL -- $26.01) provides a range of services and products to oil and natural gas companies worldwide. Halliburton will report its Q3 earnings of 2021 before the bell today.

Iridium Communications Inc. (NASDAQ:IRDM -- $39.61) provides mobile voice and data communications services and product to businesses, the United States and foreign governments, non-governmental organizations, and consumers worldwide. Iridium Communications will report its Q3 earnings of 2021 before the bell today.

Johnson & Johnson (NYSE:JNJ -- $160.12) researches and develops, manufactures, and sells a range of products in the health care field worldwide. Johnson & Johnson will report its Q3 earnings of 2021 before the bell today.

Kansas City Southern (NYSE:KSU -- $297.41) provides domestic and international rail transportation services in North America. Kansas City Southern will report its Q3 earnings of 2021 before the bell today.

Manpower Group Inc. (NYSE:MAN -- $113.13) provides workforce solutions and services in the Americas, Southern Europe, Northern Europe, and the Asia Pacific Middle East region. Manpower will report its Q3 earnings of 2021 before the bell today.

Old National Bancorp (NASDAQ:ONB -- $17.10) operates as a financial holding company. It engages in the provision of financial and banking solutions. Old National Bancorp will report its Q3 earnings of 2021 before the bell today.

PacWest Bancorp (NASDAQ:PACW -- $48.11) operates as the bank holding company for Pacific Western Bank that provides various banking products and services. PacWest Bancorp will report its Q3 earnings of 2021 before the bell today.

Philip Morris International Inc. (NASDAQ:PM -- $97.45) manufactures and sells cigarettes, other nicotine-containing products, smoke-free products, and related electronic devices and accessories. Philip Morris International will report its Q3 earnings of 2021 before the bell today.

The Procter & Gamble Co. (NYSE:PG -- $142.34) provides branded consumer packaged goods to consumers in North and Latin America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. Procter & Gamble will report its Q3 earnings of 2021 before the bell today.

Signature Bank (NASDAQ:SBNY -- $308.44) provides commercial banking products and services. Signature Bank will report its Q3 earnings of 2021 before the bell today.

Silvergate Capital Corp. (NASDAQ:SI -- $158.19) operates as a bank holding company for Silvergate Bank that provides banking products and services to business and individual clients in the United States and internationally. Silvergate Capital will report its Q3 earnings of 2021 before the bell today.

Synchrony Financial (NYSE:SYF -- $51.01) operates as a consumer financial services company in the United States. Synchrony Financial will report its Q3 earnings of 2021 before the bell today.

Synovus Financial Corp. (NYSE:SNV -- $46.35) operates as the bank holding company for Synovus Bank that provides commercial and retail banking products and services. Synovus will report its Q3 earnings of 2021 before the bell today.

The Travelers Co. (NYSE:TRV -- $152.88) provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. Travelers will report its Q3 earnings of 2021 before the bell today.

Canadian National Railway Co. (NYSE:CNI -- $123.53) engages in the rail and related transportation business. Canadian National Railway will report its Q3 earnings of 2021 after the market closes today.

Fulton Financial Corp. (NASDAQ:FULT -- $16.04) operates as a financial holding company that provides banking and financial services to businesses and consumers. Fulton Financial will report its Q3 earnings of 2021 after the market closes today.

Hancock Whitney Corp. (NASDAQ:HWC -- $47.91) operates as the bank holding company for Hancock Whitney Bank that provides a range of banking products and services to commercial, small business, and retail customers. Hancock Whitney will report its Q3 earnings of 2021 after the market closes today.

Interactive Brokers Group Inc. (NASDAQ:IBKR -- $71.62) operates as an automated electronic broker worldwide. Interactive Brokers will report its Q3 earnings of 2021 after the market closes today.

Intuitive Surgical Inc. (NASDAQ:ISRG -- $332.30) designs, develops, manufactures, and markets da Vinci surgical systems, and related instruments and accessories in the United States and internationally. Intuitive Surgical will report its Q3 earnings of 2021 after the market closes today.

Marten Transport Ltd. (NASDAQ:MRTN -- $15.68) operates as a temperature-sensitive truckload carrier for shippers in the United States, Canada, and Mexico. Marten Transport will report its Q3 earnings of 2021 after the market closes today.

National Bank Holdings Corp. (NYSE:NBHC -- $41.21) operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. National Bank will report its Q3 earnings of 2021 after the market closes today.

Netflix Inc. (NASDAQ:NFLX -- $637.97) provides entertainment services. Netflix will report its Q3 earnings of 2021 after the market closes today.

Omnicom Group Inc. (NYSE:OMC -- $76.41) provides advertising, marketing, and corporate communications services. Omnicom will report its Q3 earnings of 2021 after the market closes today.

Stride Inc. (NYSE:LRN -- $33.17) provides proprietary and third-party online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade (K-12) in the United States and internationally. Stride will report its Q3 earnings of 2021 after the market closes today.

United Airlines Holdings Inc. (NASDAQ:UAL -- $47.17) provides air transportation services in North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America. United Airlines will report its Q3 earnings of 2021 after the market closes today.

United Community Banks Inc. (NASDAQ:UCBI -- $33.94) operates as a bank holding company for the United Community Bank, a state-chartered bank that provides various banking products and services. United Community Banks will report its Q3 earnings of 2021 after the market closes today.

WD-40 Co. (NASDAQ:WDFC -- $228.96) develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. WD-40 will report its Q3 earnings of 2021 after the market closes today.

Wintrust Financial Corp. (NASDAQ:WTFC -- $84.02) operates as a financial holding company. Wintrust Financial will report its Q3 earnings of 2021 after the market closes today.

Zurn Water Solutions Corp. (NYSE:ZWS -- $36.23) designs, procures, manufactures, and markets water system solutions that provide and enhance water quality, safety, flow control, and conservation in and around non-residential buildings. Zurn Water Solutions will report its Q3 earnings of 2021 after the market closes today.

Looking ahead to tomorrow, the Federal Reserve's beige book report is due out.

All economic dates listed here are tentative and subject to change.

While earnings season is over, it won't be long before it comes around again. During this break in the action, it's a good time to review some basics about how implied volatility (IV) impacts option prices. IV plays a key role in determining the price you pay to buy an option, so it's critical to keep entry costs at a minimum in order to take full advantage of the leverage provided by options. To pinpoint stocks with attractively priced options, we've developed two proprietary volatility-based indicators: Schaeffer's Volatility Index (SVI) and Schaeffer's Volatility Scorecard (SVS).

Finding Cheap Short-Term Options with SVI
The Schaeffer's Volatility Index (SVI) is the average at-the-money (ATM) implied volatility of a stock's front-month options. The indicator is helpful to determine whether short-term options are currently pricing in high or low volatility expectations, relative to the past year's worth of data.

SVI is calculated by averaging the IV of four different options -- two calls and two puts, both in the front-month series (until the week prior to expiration, when it rolls to the next available month). Two strike prices are used; the strikes immediately above and below the stock price. The resulting average IV reading is the SVI, which is then assigned an annual percentile rank (with 0% being the lowest, and 100% the highest).

The higher the SVI percentile, the higher short-term volatility expectations are at the moment. Thus, options traders should ideally target stocks with low SVI percentile rankings, because this means near-term options are pricing in relatively low volatility expectations. Given that volatility tends to spike as known events approach, equity SVIs are usually highest prior to earnings releases.

By avoiding options with inflated SVI readings, and honing in on those with low SVIs, premium buyers can keep their cost of entry low, minimize the negative impact of time decay, and maximize the leverage of options.

Using SVS to Find Stocks That Defy Expectations

Unlike the forward-looking SVI, the Schaeffer's Volatility Scorecard (SVS) is a lagging indicator that measures a stock's realized volatility against the volatility expectations priced into that stock's options over the past year. The goal is to find which stocks have been the best -- and worst -- for premium buyers.

SVS is calculated by creating a hypothetical at-the-money straddle trade with a constant 21 days until expiration each trading day of the year, generating about 250 data points annually, with IVs derived from actual at-the-money options. The hypothetical straddle is assumed to be held until expiration, when it's closed out for intrinsic value. Based on these trades, the SVS accounts for three criteria: 40% is based on the average straddle return; 40% is based on the percentage of positive returns; and 20% is based on the percentage rank of the straddle IVs. These metrics are then combined into a score ranging from zero to 100.

If a stock has a high SVS, the underlying equity has tended to realize greater volatility on the charts over the past 12 months than what its options have priced in. The SVS then, unlike SVI, accounts for not just IV relative to itself, but IV relative to historical volatility (HV). 

As we work to uncover winning call and put trades for subscribers, both the SVI and SVS are critical tools we use to determine prime option-buying opportunities. To learn more about identifying options trades with appealing risk-reward setups, check out these tips, and find out how to use leverage ratios.