CMG Collar Strategy
CMG (Chipotle Mexican Grill, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NYSE.
Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. As of February 15, 2022, it owned and operated approximately 3,000 restaurants in the United States, Canada, the United Kingdom, France, Germany, and rest of Europe. The company was founded in 1993 and is headquartered in Newport Beach, California.
CMG (Chipotle Mexican Grill, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $41.21B, a trailing P/E of 28.72, a beta of 1.03 versus the broader market, a 52-week range of 29.75-58.42, average daily share volume of 16.2M, a public-listing history dating back to 2006, approximately 131K full-time employees. These structural characteristics shape how CMG stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 1.03 places CMG roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline.
What is a collar on CMG?
A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot.
Current CMG snapshot
As of May 15, 2026, spot at $32.66, ATM IV 36.00%, IV rank 31.98%, expected move 10.32%. The collar on CMG below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 28-day expiry.
Why this collar structure on CMG specifically: IV regime affects collar pricing on both sides; mid-range CMG IV at 36.00% typically pushes the short call premium to roughly offset the long put cost, with a market-implied 1-standard-deviation move of approximately 10.32% (roughly $3.37 on the underlying). The 28-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated CMG expiries trade a higher absolute premium for lower per-day decay. Position sizing on CMG should anchor to the underlying notional of $32.66 per share and to the trader's directional view on CMG stock.
CMG collar setup
The CMG collar below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With CMG near $32.66, the first option leg uses a $34.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed CMG chain at a 28-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 CMG shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 100 shares | Stock | $32.66 | long |
| Sell 1 | Call | $34.00 | $0.77 |
| Buy 1 | Put | $31.00 | $0.61 |
CMG collar risk and reward
- Net Premium / Debit
- -$3,250.00
- Max Profit (per contract)
- $150.00
- Max Loss (per contract)
- -$150.00
- Breakeven(s)
- $32.50
- Risk / Reward Ratio
- 1.000
Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium.
CMG collar payoff curve
Modeled P&L at expiration across a range of underlying prices for the collar on CMG. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.
| Underlying Price | % From Spot | P&L at Expiration |
|---|---|---|
| $0.01 | -100.0% | -$150.00 |
| $7.23 | -77.9% | -$150.00 |
| $14.45 | -55.8% | -$150.00 |
| $21.67 | -33.6% | -$150.00 |
| $28.89 | -11.5% | -$150.00 |
| $36.11 | +10.6% | +$150.00 |
| $43.33 | +32.7% | +$150.00 |
| $50.55 | +54.8% | +$150.00 |
| $57.77 | +76.9% | +$150.00 |
| $64.99 | +99.0% | +$150.00 |
When traders use collar on CMG
Collars on CMG hedge an existing long CMG stock position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.
CMG thesis for this collar
The market-implied 1-standard-deviation range for CMG extends from approximately $29.29 on the downside to $36.03 on the upside. A CMG collar hedges an existing long CMG position with a protective put while financing the put cost via a short call; when the premiums roughly offset, the collar acts as a near-zero-cost insurance band around the current spot. Current CMG IV rank near 31.98% is mid-range against its 1-year distribution, so the IV signal is neutral; the collar thesis on CMG should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, CMG options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to CMG-specific events.
CMG collar positions are structurally neutral (protective); the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. CMG positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move CMG alongside the broader basket even when CMG-specific fundamentals are unchanged. Always rebuild the position from current CMG chain quotes before placing a trade.
Frequently asked questions
- What is a collar on CMG?
- A collar on CMG is the collar strategy applied to CMG (stock). The strategy is structurally neutral (protective): A collar pairs long stock with a protective out-of-the-money put financed by a short out-of-the-money call, capping both tails of the position around the current spot. With CMG stock trading near $32.66, the strikes shown on this page are snapped to the nearest listed CMG chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are CMG collar max profit and max loss calculated?
- Max profit roughly equals short-call strike minus cost basis plus net premium; max loss roughly equals cost basis minus long-put strike minus net premium. Breakeven shifts by the net premium. For the CMG collar priced from the end-of-day chain at a 30-day expiry (ATM IV 36.00%), the computed maximum profit is $150.00 per contract and the computed maximum loss is -$150.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CMG collar?
- The breakeven for the CMG collar priced on this page is roughly $32.50 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current CMG market-implied 1-standard-deviation expected move is approximately 10.32%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a collar on CMG?
- Collars on CMG hedge an existing long CMG stock position; the long put sets a floor while the short call finances it, often run as a near-zero-cost hedge during expected volatility windows.
- How does current CMG implied volatility affect this collar?
- CMG ATM IV is at 36.00% with IV rank near 31.98%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.