Probability of profit (POP)

The estimated chance a trade finishes profitable, derived from implied volatility and the breakevens.

Probability of profit (POP) is the odds, at the moment you open a trade, that the position will be worth at least a penny more than you paid (or collected) by expiration. Most broker platforms calculate it from the option's implied volatility and time to expiration, so it's really the market's own estimate of where the underlying might land, not a promise.

In practice, POP is how traders compare setups on the same footing. A credit spread might show a 70% POP while a long call shows 35%, and that number tells you how often each should break even or better over many identical trades. Sellers of premium usually chase high POP; buyers of cheap out-of-the-money options accept a low one because the payoff, when it hits, is large.

The common mistake is treating POP as the whole story. A trade can win 80% of the time and still lose money overall if the 20% of losses are huge. Always read POP next to your max loss and reward, not on its own.

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Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.