Probability of Profit (POP) Calculator Overview

The POP Calculator uses the Black-Scholes model to estimate the probability of an option trade’s success, similar to broker-based tools. It helps analyze how future price movements impact options strategies.

Key Features:

✅ Calculate the probability of future price movements
✅ Evaluate price targets for options at specific dates
✅ Analyze actual or simulated options positions

Step 1: Search for Ticker

Enter the ticker symbol of the underlying asset you want to analyze.

Step 2: Add Settings

• Latest Price – Auto-filled and updated every 15 minutes.
• Future Date – Select the date you expect the asset to hit your target or an option’s expiration date.
• Volatility – Choose 30, 60, 90, or 180-day historical volatility, or enter a custom volatility forecast.
• Interest Rate – Auto-filled with the 3-month Treasury Bill rate for options pricing.
• Dividend Yield – Displays the annual dividend yield and expected dividends.

Step 3: Enter Target Price

• Enter one or two price targets to determine the probability of hitting them.
• Leaving this blank shows the expected move based on standard deviation.

Step 4: Calculate

View the results:

• Probability of Touching – Chance the asset will hit the target price.
• Probabilities at Future Date – Likelihood of closing above or below target prices.
• Standard Deviation Intervals – Expected price range based on implied volatility.

Higher implied volatility (IV) expands the price range, while lower IV shrinks it. Options360 by TradeSmith enhances this by analyzing maximum directional price moves to improve forecasts.