CMG – Chipotle Mexican Grill, Inc. – A bull call spread initiated on Chipotle this morning looks for shares in the restaurant operator to move higher by the end of the week. Shares in the burrito maker are currently up 2.5% at $293.79 just after midday in New York trading. The stock, which had dropped nearly 50% from an all-time high of $442.40 in April, down to as low as $233.82 in October, has since gained 25% in the past two months to reach the current level. One options player looking for shares in CMG to continue to rebound this week appears to have purchased an 825-lot Dec. 21 ’12 $300/$305 bull call spread for a net premium outlay of $0.95 per contract. The spread positions the trader to make money in the event Chipotle’s shares rally another 2.4% to surpass the effective breakeven price of $300.95, with maximum potential profits of $4.05 per contract available should the stock rise 3.8% to settle above $305.00 at expiration this week. CMG shares last traded above $305.00 in the first week of October.
Affiliation: Interactive Brokers
Caitlin Duffy joined Interactive Brokers in 2009. In her role as Equity Options Analyst, Caitlin provides daily market commentary; highlighting various options trades, trading patterns and strategies of interest. Through Interactive Broker's webinar program, Ms. Duffy presents a number of educational, options-related events describing the theoretical pricing of options, the option Greeks as well as options strategies.
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