As the calendar flips to October, investors are bracing for a potentially turbulent month in the markets. Historically, October has been marked by volatility, and this year may be no exception. Amidst this uncertainty, one stock stands out as a cautionary tale: Chipotle Mexican Grill Inc (NYSE:CMG). A closer examination of its past performance reveals a troubling trend – over the last decade, CMG has ended October in the red a staggering eight times, with an average loss of nearly 5%. Currently, the stock is struggling to break through the $58.50 ceiling, despite a respectable 26% gain so far this year. Options traders, however, remain optimistic, with a disproportionate number of calls being placed. This sentiment mismatch could spell trouble, as a reversal of fortunes could lead to a swift unwinding of these bullish bets. In fact, data from the International Securities Exchange, Chicago Board Options Exchange, and NASDAQ OMX PHLX reveals a call/put volume ratio of 3.56, ranking in the elevated 94th percentile of its annual range – a clear indication of excessive optimism.
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