Options Probability Calculator

What does the Options Probability Calculator do?

This calculator estimates the chance that a stock finishes above, below or between price levels you choose, on a given date. It uses the stock's current price, the time left until that date, and its expected volatility. These are the same inputs options traders use to judge how likely a trade is to work.

It's especially useful when you sell options. For example, if you're selling a put, you can see how likely the stock is to stay above your strike price. If you're selling a call, you can see how likely it is to stay below it.

How to use this calculator

1. Choose a probability model. Lognormal is the standard model used in options pricing and is the best choice for most people. Normal is a simple symmetrical bell curve, which some other calculators use.
2. Enter the stock's current price.
3. Enter your target price A. This could be a strike price you're considering, or a price you think the stock might reach.
4. If you want the odds of finishing between two prices, turn on "Use price range" and enter target price B.
5. Set the expiry date, or type the number of days.
6. Enter the expected volatility. Use the implied volatility (IV) shown for the option in your broker's option chain.

The calculator updates as you type. You'll see:
- The chance of the stock finishing below, above, and (with a price range) between your targets.
- A bell-curve chart of the likely prices on that date, with the current price and your targets marked.
- The price at each standard deviation. Roughly 68% of outcomes fall between the -1 and +1 levels, and about 95% between -2 and +2.

When is it most useful?

- Choosing a strike price for a cash secured put, covered call or credit spread. Many sellers aim for strikes with a 70% to 85% chance of staying out of the money.
- Checking whether a trade's potential reward makes sense for its odds.
- Comparing expiry dates. More time means a wider range of likely prices, so the same strike becomes less safe.
- Seeing how a move in volatility changes the odds, for example before an earnings report, when IV usually rises.

Things to keep in mind

- These are estimates based on implied volatility, which is the market's current guess. Real stock moves can be bigger or smaller.
- The odds are for where the stock finishes on the date you choose. The chance of it touching a price at some point before then is higher, roughly double for prices well away from today's.
- Big surprises, such as earnings, news or market shocks, can move a stock much further than the model suggests.
- A high chance of success doesn't make a trade safe. Always check how much you could lose if it goes wrong.

This calculator gives estimates for educational purposes only. It isn't financial advice.