Options Glossary

Glossary: Probability Out-of-The-Money

Last Updated: May 1, 2018


Probability Out-of-The-Money

What Does Probability Out-of-The-Money Mean in Options Trading?

Probability OTM (“Out the Money”) is the chance that the underlying asset’s price will end up either below a call’s strike price or above a put’s strike price at the optionsexpiration.

Probability OTM

How to Use In the Brutus Options Ranker

The Probability OTM is a profitability indicator as it looks at the chance your options setup will expire out the money.
If you are using a net-short options setup, you will want to maximize the probability OTM.  If the options expire OTM then you will keep the premium collected at trade entry.
If you are using a net-long options setup, you will want to minimize this particular value or use Probability ITM as an alternative and maximize the criterion's objective.

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