OptionAutomator Options Trading Glossary:

Definition, Examples & Resources:Probability of Profit [POP]'

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What is Probability of Profit [POP] in Options Trading ?

Probability of Profit [POP]
The Probability of Profit (POP) refers to the chance the stock price will go to a level at expiration that will produce at least $0.01 in the position. The calculation is based on the break-even price of the position and not the strike price of the individual options.

How to Use in Your Brutus Options Ranker Strategy

The Probability of Profit looks at producing, at a minimum, $0.01 of profit for a given options setup.

This can be used with all setup types and you will almost always look to maximize this criterion or target to a specific value that meets your trading objectives.

Broader Term

  • Black-Scholes

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