Robinhood has struggled amid big crypto declines. Trading the stock using this 'strangle' options strategy

February 17, 2026

TL;DR

Selling volatility on Robinhood (HOOD) can be advantageous, especially after a pullback with elevated implied volatility.
A short strangle strategy bets on the stock staying within a wide range and benefits from time decay and volatility normalization.
Robinhood's Q4 results reflected a slowdown in crypto and options trading activity, impacting its 'animal spirits' operational leverage.
Operating expenses increased year-over-year in Q4 2025, indicating continued investment to maintain its 'financial super app' position.
Despite crypto's cooling, retail trading strength in equities and options, along with record net deposits, supported transaction-based revenue.
Robinhood's market share is small relative to the total addressable market, offering growth potential by converting younger users to more products.
HOOD's stock has declined approximately 52% since October 2025 highs, which is more than Bitcoin's decline over the same period, contributing to elevated implied volatility.
The strangle selling strategy relies on structure and exits, aiming to capitalize on wide ranges and avoid near-term catalysts by balancing theta, breakevens, and gamma.
Optimal expirations for selling strangles should have meaningful theta but allow enough time to adjust, ideally longer than 30 days but shorter than the next earnings report.
Consider closing short options early when they have lost a significant portion of their value, such as 80%, or rolling the position.

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