TXRH Butterfly Strategy
TXRH (Texas Roadhouse, Inc.), in the Consumer Cyclical sector, (Restaurants industry), listed on NASDAQ.
Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. The company operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names. As of December 28, 2021, it operated 566 domestic restaurants and 101 franchise restaurants. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.
TXRH (Texas Roadhouse, Inc.) trades in the Consumer Cyclical sector, specifically Restaurants, with a market capitalization of approximately $11.79B, a trailing P/E of 28.46, a beta of 0.78 versus the broader market, a 52-week range of 153.83-199.99, average daily share volume of 1.1M, a public-listing history dating back to 2004, approximately 95K full-time employees. These structural characteristics shape how TXRH stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.
A beta of 0.78 places TXRH roughly in line with broader market moves, so the strategy payoff and realized volatility track the index-equivalent baseline. TXRH pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.
What is a butterfly on TXRH?
A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration.
Current TXRH snapshot
As of May 15, 2026, spot at $177.81, ATM IV 24.16%, IV rank 31.10%, expected move 6.93%. The butterfly on TXRH 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 butterfly structure on TXRH specifically: TXRH IV at 24.16% is mid-range versus its 1-year history, so strategy selection should anchor more to the directional thesis than to the IV regime, with a market-implied 1-standard-deviation move of approximately 6.93% (roughly $12.32 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 TXRH expiries trade a higher absolute premium for lower per-day decay. Position sizing on TXRH should anchor to the underlying notional of $177.81 per share and to the trader's directional view on TXRH stock.
TXRH butterfly setup
The TXRH butterfly below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With TXRH near $177.81, the first option leg uses a $170.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed TXRH 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 TXRH shares for the stock leg in covered calls and collars).
| Action | Type | Strike / Basis | Premium (est) |
|---|---|---|---|
| Buy 1 | Call | $170.00 | $10.45 |
| Sell 2 | Call | $180.00 | $4.00 |
| Buy 1 | Call | $185.00 | $2.38 |
TXRH butterfly risk and reward
- Net Premium / Debit
- -$482.50
- Max Profit (per contract)
- $467.95
- Max Loss (per contract)
- -$482.50
- Breakeven(s)
- $174.83
- Risk / Reward Ratio
- 0.970
Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit.
TXRH butterfly payoff curve
Modeled P&L at expiration across a range of underlying prices for the butterfly on TXRH. 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% | -$482.50 |
| $39.32 | -77.9% | -$482.50 |
| $78.64 | -55.8% | -$482.50 |
| $117.95 | -33.7% | -$482.50 |
| $157.26 | -11.6% | -$482.50 |
| $196.58 | +10.6% | +$17.50 |
| $235.89 | +32.7% | +$17.50 |
| $275.21 | +54.8% | +$17.50 |
| $314.52 | +76.9% | +$17.50 |
| $353.83 | +99.0% | +$17.50 |
When traders use butterfly on TXRH
Butterflies on TXRH are pinning bets - traders use them when they expect TXRH to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
TXRH thesis for this butterfly
The market-implied 1-standard-deviation range for TXRH extends from approximately $165.49 on the downside to $190.13 on the upside. A TXRH long call butterfly is a pinning play: it pays maximum at the middle strike if TXRH settles there at expiration, with the wing legs capping both the cost and the maximum loss to the net debit. Current TXRH IV rank near 31.10% is mid-range against its 1-year distribution, so the IV signal is neutral; the butterfly thesis on TXRH should anchor more to the directional view and the expected-move geometry. As a Consumer Cyclical name, TXRH options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to TXRH-specific events.
TXRH butterfly positions are structurally neutral / pin (limited-risk, limited-reward); 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. TXRH positions also carry Consumer Cyclical sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move TXRH alongside the broader basket even when TXRH-specific fundamentals are unchanged. Always rebuild the position from current TXRH chain quotes before placing a trade.
Frequently asked questions
- What is a butterfly on TXRH?
- A butterfly on TXRH is the butterfly strategy applied to TXRH (stock). The strategy is structurally neutral / pin (limited-risk, limited-reward): A long call butterfly buys one lower-strike call, sells two ATM calls, and buys one higher-strike call, paying a small net debit for a defined-risk position that maxes out if the underlying pins the middle strike at expiration. With TXRH stock trading near $177.81, the strikes shown on this page are snapped to the nearest listed TXRH chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
- How are TXRH butterfly max profit and max loss calculated?
- Max profit equals the wing width minus net debit times 100 (reached when the underlying pins the middle strike); max loss equals the net debit times 100. Two breakevens at lower-wing plus debit and upper-wing minus debit. For the TXRH butterfly priced from the end-of-day chain at a 30-day expiry (ATM IV 24.16%), the computed maximum profit is $467.95 per contract and the computed maximum loss is -$482.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TXRH butterfly?
- The breakeven for the TXRH butterfly priced on this page is roughly $174.83 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 TXRH market-implied 1-standard-deviation expected move is approximately 6.93%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
- When should you consider a butterfly on TXRH?
- Butterflies on TXRH are pinning bets - traders use them when they expect TXRH to settle near a specific level at expiration (often the prior close, a round number, or the max-pain strike) and want defined-risk exposure to that outcome.
- How does current TXRH implied volatility affect this butterfly?
- TXRH ATM IV is at 24.16% with IV rank near 31.10%, 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.