Apple and Chipotle will be reporting earnings after Tuesday’s close, and it seems likely that both will get a strong boost from the news. Regardless of which way the stocks swing, it was not possible to get a decent straddle bet using puts and/or calls. Chipotle out-of-the-moneys were trading at about five times the actual volatility of the underlying stock, while Apple puts and calls were priced at about 3x. My hunch is that the former will be a ripe short “on the news” if it hits my rally target. For further details, check out the CMG tout and the accompanying chart below.
