CMG Covered Call 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 covered call on CMG?
A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income.
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 covered call 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 covered call structure on CMG specifically: CMG IV at 36.00% is mid-range versus its 1-year history, so the credit collected on a CMG covered call sits in line with its long-run distribution, 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 covered call setup
The CMG covered call 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 |
CMG covered call risk and reward
- Net Premium / Debit
- -$3,189.00
- Max Profit (per contract)
- $211.00
- Max Loss (per contract)
- -$3,188.00
- Breakeven(s)
- $31.89
- Risk / Reward Ratio
- 0.066
Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium.
CMG covered call payoff curve
Modeled P&L at expiration across a range of underlying prices for the covered call 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% | -$3,188.00 |
| $7.23 | -77.9% | -$2,465.98 |
| $14.45 | -55.8% | -$1,743.96 |
| $21.67 | -33.6% | -$1,021.94 |
| $28.89 | -11.5% | -$299.92 |
| $36.11 | +10.6% | +$211.00 |
| $43.33 | +32.7% | +$211.00 |
| $50.55 | +54.8% | +$211.00 |
| $57.77 | +76.9% | +$211.00 |
| $64.99 | +99.0% | +$211.00 |
When traders use covered call on CMG
Covered calls on CMG are an income strategy run on existing CMG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
CMG thesis for this covered call
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 covered call collects premium on an existing long CMG position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether CMG will breach that level within the expiration window. Current CMG IV rank near 31.98% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call 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 covered call positions are structurally neutral to slightly bullish; 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. Short-premium structures like a covered call on CMG carry tail risk when realized volatility exceeds the implied move; review historical CMG earnings reactions and macro stress periods before sizing. Always rebuild the position from current CMG chain quotes before placing a trade.
Frequently asked questions
- What is a covered call on CMG?
- A covered call on CMG is the covered call strategy applied to CMG (stock). The strategy is structurally neutral to slightly bullish: A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income. 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 covered call max profit and max loss calculated?
- Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the CMG covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 36.00%), the computed maximum profit is $211.00 per contract and the computed maximum loss is -$3,188.00 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a CMG covered call?
- The breakeven for the CMG covered call priced on this page is roughly $31.89 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 covered call on CMG?
- Covered calls on CMG are an income strategy run on existing CMG stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
- How does current CMG implied volatility affect this covered call?
- 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.