Option Probability Calculator
Estimate theoretical option probabilities, expected price range and the likelihood of an underlying finishing above, below or between selected price levels at expiry.
Theoretical Expected Price Range
Probability Distribution
Strike Probability
Probability Scenarios
What the Probability Means
The StockMaster Universe Option Probability Calculator is an educational tool designed to help F&O traders understand the theoretical probability of different price outcomes before an options contract reaches expiry.
Options trading involves uncertainty, and traders often want to know how likely an underlying asset is to finish above a strike price, below a strike price or within a particular price range. This calculator provides model-based probability estimates using factors such as the current underlying price, strike price, implied volatility and time remaining until expiry.
What Is Option Probability?
Option probability refers to the estimated likelihood of an underlying asset reaching a particular price level or finishing in a particular area at expiry.
For example, an options trader may want to estimate the theoretical probability that an index will finish above a particular strike price at expiry. A trader may also want to estimate the probability that the underlying remains within a specific range.
These calculations can help traders understand the potential distribution of outcomes, but they should not be interpreted as guaranteed predictions.
How Does the Calculator Work?
The StockMaster Universe calculator allows you to enter:
- Current underlying price
- Option strike price
- Days to expiry
- Implied volatility
- Risk-free interest rate
- Call or Put
- Lower target price
- Upper target price
The calculator then produces several theoretical probability estimates.
These include probability of finishing ITM, probability of finishing OTM, probability above the strike, probability below the strike and probability of finishing inside a selected price range.