Options Glossary

Glossary: Probability Out-of-The-Money

Last Updated: May 1, 2018

Glossary

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.

Synonyms:
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.

Broader & Narrower Options Trading Terms

Related Options Trading Terms

homeusercrossmenuarrow-right-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram