Evaluating Opportunity Probabilities

The 'Opportunity chance of profit is more than 25%' decision evaluates a position’s probability of profit to filter opportunities when adding new positions.

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How are opportunity probabilities calculated?

Please refer to the Technical Documentation.

How are the profit, in-the-money, and max loss criteria calculated?

Please refer to the Technical Documentation.

What are the definitions of profit, in-the-money, and max loss?

"Chance of profit" means the probability that the position will yield a profit at expiration. "In-the-money" is the probability the underlying price will be above or below the option's strike price at expiration. "Max loss" is the maximum amount that can be lost on the position.

Can these calculations be done on single leg options positions?


Can this calculation be done on stock or is it for options only?

Some opportunities are exclusively used for options strategies (such as ITM) and others can be used for options and stocks.

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