When we launched our premier options trading program, Options360, our goal was simple: give traders a real edge. To do that, our data team developed two powerful indicators that help you make smarter, more confident trades: 

• Probability of Profit (POP) 
• Return on Investment (ROI) 

These tools are built on our proprietary risk-management framework, including the Volatility Quotient (VQ) and the historical trading behavior of the underlying stock. 

🎯 What Is POP? 

POP tells you the likelihood that your options trade will expire worthless—which is exactly what you want when using income-generating strategies like selling options. A higher POP means a higher chance of keeping the full premium you collected. 

For example, if a trade on Tesla (TSLA) shows a POP of 82%, that means there’s an 82% chance the option will expire out of the money—so you keep 100% of the premium. 

💰 What About ROI? 

ROI shows your expected return over the life of the trade. It’s calculated based on the premium collected and the capital required to place the trade.  

In this case, the target ROI in a margin account is almost 10%. 

Where to Find POP and ROI: 

You’ll see POP and ROI displayed on the option tile cards and across our platform, including: 

• Options360 Strategy Overview 
• Predictive Alpha Options (PAO) Strategy Overview 
• Trade Overview (for base options not part of a TradeSmith strategy) 

 Each option tile includes: 

• Option Ticker & Underlying Asset 
• Liquidity Icon 
• Max Profit – The premium you collect 
• POP – Probability the trade expires worthless 
• Capital Required – Margin or cash-secured amount needed 
• Target ROI – Expected return over the trade’s duration 
• Assignment Cost – What you’d pay for the shares (minus premium) if assigned  

Liquidity Icon:

 Green = High Liquidity 
This contract sees a high level of trading activity. You can usually enter and exit positions quickly, with minimal friction and tighter bid/ask spreads.

 Yellow = Medium Liquidity 
Trading is still very doable, but less seamless. Expect slightly wider spreads and a bit more time for orders to fill.

 Red = Low Liquidity 
This contract trades infrequently. Orders may take longer to fill — if at all — and spreads can be wide, making trades potentially slower and more expensive.

Why POPs and ROIs May Differ: 

While POP and ROI mean the same across Options360, Predictive Alpha Options (PAO), and base trades, the calculation method differs: 

• Options360 and base trades: Based on historical volatility and VQ 
• PAO: Based on projected price movement, which may result in a different POP and ROI for the same trade. 

Understanding POP helps you assess risk and reward at a glance. The ROI tells you how much money you can expect to earn over the time frame of the options trade. 

Whether you’re using Options360, PAO, or standard strategies, POP gives you a data-backed edge in your income trades.