Foundations
The win-chance number, and how it can fool you
The app estimates how often a trade may win. That number helps, but only when you read it beside max profit and max loss.
Every option trade is a probability statement. When you sell a credit spread for $50 with $200 of risk, you are saying: I think the chance of keeping that $50 is high enough to justify the chance of losing $200. , the number this app calls PoP, is the model's best guess at that chance.
How PoP gets calculated
PoP comes from current and the trade's prices. The model translates IV into a price distribution for the stock at expiration, then asks what fraction of that distribution leaves the trade profitable. A spread with breakevens at $190 and $210, on a stock currently at $200 with moderate IV, might come out around 65% PoP.
It is an estimate, not a guarantee. The model assumes the price distribution stays the same shape it has today. If volatility changes, the actual probability changes too. So treat PoP as a ranking tool, not a prophecy.
The trap of high PoP
Beginners see 90% PoP and think they have found a free lunch. They have not. High-PoP trades almost always have a reward-to-risk ratio that punishes a single loss. A 90% PoP credit spread might collect $20 of credit on $480 of risk. You will be right nine trades in a row, then one loss wipes out the previous nine wins.
The right framing is not "how often will I win" but "how often will I win, weighted by what I win and what I lose."
That weighted version has a name. It is called expected value. Expected value is what you should actually optimize for. PoP is one input.
How I use PoP in practice
- Below 50%: I almost never take it for income. Reserved for directional bets where I am paying for convexity.
- 50 to 65%: Sweet spot for many directional credit spreads. The reward usually meets the risk.
- 65 to 80%: Where most of my BWBs and jade lizards live. Comfortable and repeatable.
- Above 80%: Inspect carefully. The reward is often too thin to justify the tail risk.
What to do next
Open the scanner. Sort by highest win chance. Look at the top result and the bottom result. Compare their max profit and max loss. The top result usually has a smaller payoff. The bottom result usually has a bigger one. That tradeoff is the entire point of options trading.