Chipotle Stock Eyes Record High on First-Ever Stock Split

Short-term options traders have been more bearish than usual of late

Deputy Editor
Mar 20, 2024 at 9:11 AM
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Shares of Chipotle Mexican Grill, Inc. (NYSE:CMG) are 6.1% higher in premarket action, after the fast-casual chain's board of directors approved a 50-for-1 split -- the company's first stock split ever. In a statement, Chipotle's CFO Jack Hartung said the split will make CMG "more accessible to employees as well a a broader range of investors."

Should these premarket gains hold, Chipotle stock will open at around $2,950, surpassing its March 18 record high of $2,813.99. The stock has ripped up the charts over the course of the new year, with a brief pullback in early March caught by its 30-day moving average. Coming into today, CMG was already up 22.3% 2024, and boasted an even more impressive 73.7% year-over-year gain. 

Despite this outperformance, short-term options traders are more bearish than usual, and an an unwinding of this pessimism could add more tailwinds. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.70 that stands higher than all but 2% of annual readings.

Premium traders looking to speculate can do so now for a bargain, per CMG's Schaeffer's Volatility Index (SVI) of 19%, which ranks in the low 11th percentile of readings from the past 12 months. This implies these traders are pricing in low volatility expectations. What's more, its Schaeffer's Volatility Scorecard (SVS) of 80 out of 100 indicates that Chipotle stock tends to outperform said volatility expectations. 


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