February 2026 Options Now Available For Texas Roadhouse (TXRH)

The article analyzes specific options strategies for Texas Roadhouse (TXRH) stock, presenting opportunities for institutional investors. It highlights selling a $160.00 strike put, which offers a 4.00% premium return (13.64% annualized YieldBoost) with a 61% probability of expiring worthless, effectively lowering the entry price for investors interested in acquiring TXRH shares. Concurrently, a covered call strategy utilizing a $165.00 strike call could yield a 6.32% total return if the stock is called away, or a 5.50% premium return (18.76% annualized YieldBoost) if the option expires worthless, with a 47% probability, providing income generation for existing shareholders.

Analysis

The analysis presents two distinct options strategies for Texas Roadhouse (TXRH) stock, catering to different investor objectives. For investors interested in acquiring TXRH shares, selling a $160.00 strike put contract yields a $6.40 premium, effectively reducing the cost basis to $153.60 if assigned, compared to the current stock price of $163.66. This out-of-the-money strike (2% discount) has a 61% probability of expiring worthless, offering a 4.00% return on cash commitment, or 13.64% annualized (YieldBoost).

Conversely, for existing TXRH shareholders, a covered call strategy involves purchasing shares at $163.66 and selling a $165.00 strike call for a $9.00 premium. This strategy offers a 6.32% total return if the stock is called away at the February 2026 expiration. If the out-of-the-money call (1% premium) expires worthless, which has a 47% probability, the investor retains the shares and collects the premium, representing a 5.50% boost or 18.76% annualized (YieldBoost).

Both options strategies exhibit an implied volatility of approximately 31%, which is slightly higher than TXRH's calculated trailing twelve-month actual volatility of 28%. This suggests that current option premiums may offer a slight advantage to sellers due to this elevated implied volatility. The strategies provide defined risk/reward profiles, allowing investors to leverage specific views on TXRH's price trajectory while generating income or reducing entry costs.

Key Decisions for Investors

• Investors with a bullish long-term view on TXRH but seeking a lower entry point should consider selling the $160.00 strike put to potentially acquire shares at a discount or earn a 13.64% annualized premium if the option expires worthless.
• Existing TXRH shareholders looking to generate income and are comfortable with a capped upside should evaluate the $165.00 strike covered call strategy, which offers an 18.76% annualized premium boost if the option expires worthless.
• Monitor TXRH's fundamental performance and market volatility, as the current implied volatility of 31% is slightly above historical levels, which could influence the attractiveness of option premiums.