Should You Buy Robinhood (HOOD) Stock Before February 2026?

Robinhood Markets, Inc. (NASDAQ: HOOD) has emerged as one of the most volatile and scrutinized stocks in recent years. With a 228.42% annual increase in 2025 compared to the previous year, the stock has demonstrated both explosive growth and significant risk. As the February 2026 options expiration approaches, investors must evaluate whether to buy HOOD stock or deploy options strategies to capitalize on its probabilistic price movements. This analysis synthesizes recent data on implied volatility, options activity, and expected price ranges to guide decision-making.

Stock Price Trends and Volatility Dynamics

HOOD's stock price has surged from $12.74 in 2023 to a peak of $152.46 on October 9, 2025, before settling at $122.37 as of December 22, 2025 according to data. This trajectory reflects a mix of speculative fervor and macroeconomic factors. However, the stock's volatility remains a critical consideration. As of November 26, 2025, the implied volatility (IV) for December 26, 2025, expirations averaged 36.92% for calls and 36.53% for puts, significantly lower than the 20-day historical volatility (HV) of 66.1 according to market analysis. This discrepancy suggests that the market is pricing in reduced near-term volatility, potentially due to stabilizing fundamentals or waning retail trading activity.

For longer-dated options expiring in February 2026, the IV implies a projected price swing of 16.11% in either direction, translating to a range of $101.04 to $139.84. This expected move is anchored to a current price of $120.44, aligning with the December 22 closing price of $122.37 according to stock data. The broader range indicates that the market anticipates heightened volatility around February 11, 2026, when HOOD is expected to report earnings.

Options Market Activity and Open Interest

Options trading in HOOD remains robust despite a 28% decline in November 2025 compared to October 2025. The 193.2 million contracts traded in November 2025 reflect sustained retail and institutional interest, while open interest rose 4.2% to 2.2 million contracts. Call open interest increased by 5.0% to 1.4 million contracts, outpacing the 2.9% rise in put open interest to 839,973 contracts. This skew toward calls suggests bullish sentiment, though it may also indicate a risk of overbought conditions.

The February 2026 options chain, accessible via platforms like Yahoo Finance, reveals a concentration of open interest around the $120–$140 strike range. This aligns with the probabilistic price range derived from IV, suggesting that market participants are hedging against both upside and downside risks.

Probabilistic Price Ranges and Earnings Volatility

Using a Black-Scholes model integrated with IV data, the February 2026 expiration implies a 16.11% expected move. This translates to a 68% probability that HOOD will trade between $101.04 and $139.84 by February 26, 2026. However, historical patterns reveal a critical nuance: while the market prices in a 16.11% swing, actual earnings moves have often exceeded or fallen short of expectations. For instance, HOOD's November 2025 earnings triggered a -10.8% price drop, surpassing the implied ±8.1% move. This highlights the risk of IV crush-where post-earnings volatility collapses, often by 22% on average according to market data.

The February 11, 2026, earnings date carries an EVR of 4.0, indicating moderate sensitivity to earnings surprises. Traders should anticipate a 50% probability of a ±12.0% intraday move during the earnings announcement according to market analysis, though a close-to-close swing of this magnitude has historically occurred only 21% of the time.

Options Strategy Recommendations

Given the probabilistic price range and volatility dynamics, several strategies merit consideration:

1. Buying at-the-money (ATM) straddles or out-of-the-money (OTM) strangles ahead of February 11, 2026, could profit from the expected ±12.0% earnings move. However, traders must account for the risk of IV decay if the actual move falls short of expectations.

2. With a high probability of HOOD trading between $101.04 and $139.84, iron condors-selling OTM calls and puts while buying further OTM options-could capitalize on the stock's expected consolidation. This strategy benefits from time decay but carries risk if the stock breaks out of the range.

3. Investors holding HOOD stock might consider selling covered calls with strikes between $130 and $140 to generate income, given the high probability of the stock clustering around $140.

4. For those bullish on HOOD's long-term prospects, bull call spreads with strikes between $120 and $140 could limit downside risk while participating in a potential rebound.

Conclusion

Robinhood's stock remains a high-risk, high-reward proposition ahead of February 2026. The probabilistic price range of $101.04 to $139.84 and the expected 16.11% volatility suggest that the market is pricing in significant movement, particularly around earnings. However, the current IV of 53.1, which is 19.7% below its 20-day HV of 66.1 according to market analysis, indicates that options may be undervalued relative to historical volatility. This creates opportunities for strategies like straddles or iron condors but also necessitates caution against IV crush post-earnings according to market data.

For investors considering a direct stock purchase, the $122.37 price as of December 22, 2025, sits near the midpoint of the projected range, offering a balanced entry point. However, given the stock's volatility and the availability of cost-effective options strategies, a derivatives-based approach may be more prudent for risk-adjusted returns.