This tool takes the historical price data of a ticker and calculates the probability of the ticker’s option strike price going ITM. I have been using this to sell both TSLA OTM put and call weekly options recently. Not recommended but sometimes I do leverage if it shows 0% - 0.25% chance on the calculator (Not financial advice). I hope this helps options seller here to optimize theta decay capture while knowing the risk that one may face. It is free and simple to use!

I am currently looking to develop other tools (valuation, tracker, price notification etc.) which can optimize my short option trades so feel free to reach out to me if you have any other ideas which you may think it is useful for you and the option trading community.

Note: The calculator is represented using historical data and not indicative of potential price movement.

How to run this:

1. Download Stonkbuddy either from Android or IOS app store

Android link: https://play.google.com/store/apps/details?id=com.openput.stonkbuddy_app

IOS link: https://apps.apple.com/sg/app/stonkbuddy/id1572078411

2. Login with a Gmail or apple ID account

3. Navigate to Analyze -> Stock Options -> OTM profit probability

4. Key in your ticker, number of trading days to expiry and the strike price and then tap Search. You should be able to see the probability calculated.

You may use up to 10 free calculations (30 free on the first day) and it will reset on a daily basis.

Refer to the pics below for example.

TL;DR: Planning to close positions before expiration (taking profits early) affects the Probability of Profit (POP). I’ve made a free calculator website that uses a complex algorithm to calculate POP for this situation. The Mobile UI needs more work but you can try it on desktop here: https://thetapopper.com/. You do need to make an account though (this is to prevent spam).

Disclaimer: The website doesn't offer financial advice. Please inform yourself on how the algorithm works and its limitations on the site.

Hello Everyone,

Like myself, there are many traders here that stick with the philosophy of 'taking profits early', meaning we close our positions once we hit some specific target profit like 50% of maximum profit or a multiple of the debit paid. Some even choose to close their positions at some specific date like 21 DTE, regardless of whether they make or lose money, to avoid gamma and assignment risk. Some do both where they'll close their position once they hit the target profit, or close it at 21 DTE, whichever comes first. Intuitively, we know that both of these things affect our Probability of Profit (POP) for the following reasons:

1. The lower your target profit, the higher your POP since your threshold for making a profit is lowered.

2. The earlier you close your positions, regardless of whether you make or lose money, the lower your POP. This is because you're giving your position less time to become profitable.

So how do we calculate the POP then? Popular POP calculators like OptionStrat and optionsprofitcalculator do not take this into account; they assume that you will hold your position till expiration which some traders like myself rarely ever do. This is what inspired me to make a more advanced POP calculator website that can do the work. Simply specify your target profit (e.g. 65% of Max Profit) and a closing date (e.g. 21 DTE). The calculator will then tell you the probability of hitting this target profit at, or before, the closing date! You can also add multiple combinations of target profits and closing dates!

How does it work? A detailed explanation of the algorithm and its limitations can be found here. Essentially, the website uses Monte Carlo Simulations to run thousands of individual stock price simulations, finds the number of 'successful' simulations meeting the above requirements, and averages out a POP number. Sound familiar? This algorithm is similar to what TastyWorks uses for their P50 number! However, P50 only gives you the probability of reaching 50% of max profit at, or before, expiration. My calculator lets you choose any target profit at any closing date, plus multiple combinations of them!

Here’s a short video of how it works (on desktop):

You do need to make an account to access the site. This is just to prevent people from spamming the server/API which handles the calculations. An API rate limit of 5 calls/minute is also there to prevent spamming, but this could change in the future.

Features + improvements I’d like to add in the future (given enough demand):

1. Add more strategies.

2. Add live/delayed options data. Data is pricey though so might have to add some sort of subscription service to support this.

3. Being able to share and save trades.

4. Python module for accessing the API.

5. Improve mobile UI.

6. Output more parameters like the Net Greeks.

Feel free to share your thoughts and any bugs that you find!