How is Probability of expiring on TOS calculated?

Discussion in 'Options' started by eldorado1, Jan 24, 2012.

  1. daveyc

    daveyc

    although they can be some sort of measure, probability of expiring/touching on tos is just another tool and i can see how a trader can be easily drawn to it and rely solely on this tool but the problem is that markets move and next week's calculations will be different from today.
     
    #11     Jan 25, 2012
  2. Let's say you want to use an income strategy on the market, why not try to get the best deal and choose a security with the ideal probility of expiring out of SPY or DIA or IWM for instance? The calculations I use help me do just that.

    I don't overlook technical and fundamental analysis when entering and maintening a position.
     
    #12     Jan 26, 2012
  3. newwurldmn

    newwurldmn

    Not saying that they aren't relevant measures.

    It is just a different way of looking at the option value. You must have a fundamental of technical view that is independent of the option pricing.
     
    #13     Jan 26, 2012
  4. The calculations you use don't really help you do anything of the sort, unfortunately. If only things were that simple, we'd all be bajillionaires in no time flat.
     
    #14     Jan 27, 2012
  5. PLS, its only a small fraction of a trading plan.
     
    #15     Jan 27, 2012