Time for CMG to purge

I’ve actually never eaten at CMG (Chipotle Mexican Grill) before, but I’ve passed by it many times while going to Subway or Quiznos or real sit down restaurants.  Since I don’t eat there, it only makes sense the stock should go down.

I’ve thus decided to buy a couple puts in CMG, just looking to take advantage of a little drop today or tomorrow or the next couple days.

Learning while trading is very important.  More important than learning while trading is adapting while trading.  I haven’t done as much adapting as learning, but there’s still time left for me.  At least a few minutes.

Buy:
CMG Mar08 $125 puts (CMGOE), 2 @ $18.00
   stock price when entered $116.78

New, new, new!  I’m looking at an exit point of about $21 or a stop loss point of $16.00, which is really new for me.  I’m not sure if this is an adaptation or a learning thing, actually having a stop loss in mind.  If I had been so smart and followed through with a stop loss on my current JCP puts, I wouldn’t be down over $3k on the 10 puts I’m holding.

So… let’s see what happens today.

My guess is the Fed will cut 25 points, the market will react negatively, and anyone short or with puts will eat steak for dinner, and they won’t get their steak from CMG.