Option Sensei

Chipotle Mexican Grill (CMG) is set to report earnings on October 20th and a disappointing report could leave investors with indigestion.

Refiners have been the bright light in the energy patch thanks to low oil delivering high margins. But the best days might be over and shares are looking pricey as trickle down of expanded margins and higher sales volume might be drying up.

Cheap gas, diverse product line and cyclical demand should drive sales for the nation’s largest car dealer.

The current skew in implied volatility created by the recent sell-off make this the right time for using calendar spreads for downside protection heading into the crucial, and often cruel, October earnings season.