TXRH Strangle 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 strangle on TXRH?
A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money.
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 strangle 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 strangle 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 strangle setup
The TXRH strangle 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 $185.00 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 | $185.00 | $2.38 |
| Buy 1 | Put | $170.00 | $2.00 |
TXRH strangle risk and reward
- Net Premium / Debit
- -$437.50
- Max Profit (per contract)
- Unbounded
- Max Loss (per contract)
- -$437.50
- Breakeven(s)
- $165.63, $189.38
- Risk / Reward Ratio
- Unbounded
Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit.
TXRH strangle payoff curve
Modeled P&L at expiration across a range of underlying prices for the strangle 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% | +$16,561.50 |
| $39.32 | -77.9% | +$12,630.13 |
| $78.64 | -55.8% | +$8,698.77 |
| $117.95 | -33.7% | +$4,767.40 |
| $157.26 | -11.6% | +$836.03 |
| $196.58 | +10.6% | +$720.33 |
| $235.89 | +32.7% | +$4,651.70 |
| $275.21 | +54.8% | +$8,583.07 |
| $314.52 | +76.9% | +$12,514.43 |
| $353.83 | +99.0% | +$16,445.80 |
When traders use strangle on TXRH
Strangles on TXRH are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the TXRH chain.
TXRH thesis for this strangle
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 strangle is the OTM cousin of the straddle: lower up-front cost but the underlying has to travel further past either OTM strike before the position turns profitable at expiration. Current TXRH IV rank near 31.10% is mid-range against its 1-year distribution, so the IV signal is neutral; the strangle 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 strangle positions are structurally neutral / high-volatility (long premium, OTM); 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 strangle on TXRH?
- A strangle on TXRH is the strangle strategy applied to TXRH (stock). The strategy is structurally neutral / high-volatility (long premium, OTM): A long strangle buys an OTM call and an OTM put at offset strikes, cheaper than a straddle but requiring a larger underlying move to profit since both wings start out-of-the-money. 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 strangle max profit and max loss calculated?
- Upside max profit is unbounded; downside max profit is bounded at the put strike minus the combined debit (reached at zero). Max loss equals the combined debit times 100 (reached anywhere between the two OTM strikes). Two breakevens at call-strike plus debit and put-strike minus debit. For the TXRH strangle priced from the end-of-day chain at a 30-day expiry (ATM IV 24.16%), the computed maximum profit is unbounded per contract and the computed maximum loss is -$437.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
- What is the breakeven for a TXRH strangle?
- The breakeven for the TXRH strangle priced on this page is roughly $165.63 and $189.38 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 strangle on TXRH?
- Strangles on TXRH are the cheaper cousin of the straddle - traders use them when they want a large directional move but are willing to give up the inner-strike sensitivity in exchange for a lower up-front debit on the TXRH chain.
- How does current TXRH implied volatility affect this strangle?
- 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.