Decision Recipes

Evaluating Underlying Symbol Probability Within Range

Evaluating underlying symbol probability within range allows you to evaluate the probability of a symbol’s price being within a range in a certain number of days. Here is how to use it.
Evaluating Underlying Symbol Probability Within Range
Steve Henry
May 24, 2021

The decision recipe for evaluating an underlying symbol’s price probability within a range has six inputs:

  • Symbol
  • Low price
  • High price
  • Days
  • More than/less than
  • Percentage

This decision recipe allows you to evaluate the probability of a symbol’s price being within a range in a certain number of days. Probabilities are derived from the Black-Scholes options pricing model.

Screenshot displaying the decision recipe for evaluating underlying symbol probability within range

Enter a symbol and select “Next.” The second and third fields prompt a dropdown menu to choose the security’s low price and high price, where you manually input the values to create a range. Manually enter the number of days into the fourth field. The fifth field has you define if the probability is above or below the sixth field, a manually entered percentage between 0 and 100. When you have finished creating the recipe select, “Save.”

Screenshot highlighting the save button following the decision recipe inputs

NOTE: You can also create a custom input, which allows you to input the field later to make the decision recipe dynamic across all automations.

The decision will be added to the list of criteria. You have the option to add more decisions to the recipe or return to the automation editor. When finished, select “Save” again to return to the automation editor.

Screenshot highlighting the save button to return to the automation editor

The automation editor will display your completed decision criteria for evaluating an underlying symbol’s price probability within a range.

Screenshot highlighting the decision recipe within the automation editor

You can always select the decision inside the automation editor and make changes to the criteria.

No tags found.
Next article
Evaluating Opportunity Return Expectations
Evaluating opportunity return expectations allows you to evaluate a position’s rate of return probability. Here is how to use it.
Was this helpful?
FAQs

How is this probability calculated?

Visit our Tech Docs page on Probability to learn more: Probability - Option Alpha Docs

Can this criteria be used as both an entry and an exit criteria?

Yes

Is this calculation done just one time upon entry or is it recalculated on every bot run?

It is checked on every bot run.

Related articles

Trade smarter with automation