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Glossary · Options

Probability of profit

The modelled chance a position makes money if held to expiration.

Why it matters

Read it together with the payoff. High probability trades usually win small and lose big; low probability trades the reverse.

How to read it

Cluenex computes it from the implied volatility of the chain with a lognormal price model. It describes the model, not a promise.

Also called: POP

Related

BreakevenThe stock price at expiration where the position neither makes nor loses money.Max profit and max lossThe most a position can make and lose, if held to expiration.

In the Cluenex app, this explanation opens next to every probability of profit figure, with the live reading for the stock you are looking at. Open it in Cluenex