probability of profit

Search for glossary terms (regular expression allowed)


Term Definition
probability of profit

Based on a statistical normal distribution, we can say that if you sell an option 1 standard deviation out of the money, there is an 84% probability that the option will expire worthless, in which case you profit since you get to keep the premium.

Author - Nick Kraakman
Hits - 40
Value Investing Bootcamp - Online Investment Course