Options Probability Calculator

Enter a stock price, strike, IV, and DTE. Pick call or put. The calculator instantly shows you: probability of expiring ITM, probability of expiring OTM, probability of touching the strike at any point before expiration, and the 1 SD and 2 SD expected move ranges.

The two numbers you care about most: Probability OTM (your probability of profit on the short option) and Expected Move (the range the stock has a 68% chance of staying inside). Make sure your strike sits outside the expected move zone and that your POP hits your target. I aim for 70-80% on wheel trades.

Try different strikes and watch the numbers shift in real time. Lower put strike = higher probability OTM but less premium. That's the fundamental tradeoff in every income trade. This calculator makes it visible.

I use this before every single trade. Here's when it matters most:

• Before selling any CSP or covered call: Confirm your strike has at least 70% probability of expiring OTM (0.30 delta or lower). That's my minimum. Below that and I need a really good reason to take the trade.
• Before earnings: Plug in the elevated IV around an earnings date and see how far the market expects the stock to move. If your strike is inside the expected move, don't sell it. Period.
• When you're worried about getting tested: Even if your put has a 75% chance of expiring OTM, the probability of touching is around 50%. That means a coin flip the stock hits your strike at some point. Good to know before you enter.
• Comparing IV environments: Run the same strike at 25% IV and 40% IV. Higher IV expands the expected move, which actually makes the same strike proportionally safer — and it pays more premium. Win-win.

Every option has a built-in probability of expiring ITM or OTM. These come straight from Black-Scholes and the option's IV. If you're selling options for income — especially running the wheel — these numbers should drive every strike you pick.

Probability of Expiring ITM vs OTM

Probability of expiring ITM is the market's best guess that the stock finishes past your strike at expiration. For a call, that's finishing above the strike. For a put, finishing below it. It tracks closely with delta — a 0.30 delta put has roughly a 30% chance of finishing ITM.

I target strikes with 70-80% probability of expiring OTM (delta around 0.20-0.30) on my CSPs. That means a 70-80% chance I keep the full premium and never get assigned. Those are the odds I want on my side.

Probability of Touching

This one catches people off guard. Touching is different from expiring ITM. The stock can hit your strike at any point during the contract — even briefly — and then reverse. Rule of thumb: probability of touching is about 2x the probability of expiring ITM. So your "safe" 25% ITM put has a 50% chance of touching the strike at some point. That's when the anxiety kicks in. Know this number before you enter.

Standard Deviations & Expected Move

IV tells you how far the market expects a stock to move. The expected move formula:

Expected Move = Stock Price × IV × √(DTE / 365)

That's the 1 standard deviation range — about a 68% chance the stock stays inside it by expiration. The 2 SD range (95% probability) is just double that. I use this as my sanity check: if my strike is inside the 1 SD range, I'm taking on more risk than "normal." If it's outside 2 SD, the premium probably isn't worth my time.

Using Probability for Strike Selection

Probability turns strike selection from guessing into a disciplined process. Here's how I think about it:

• Conservative (0.15-0.20 delta): About 85% probability of expiring OTM. Lower premium, but you rarely get tested. Good for high-priced stocks where assignment would hurt.
• My sweet spot (0.25-0.30 delta): 70-75% OTM probability. Best balance of income and safety. This is where I live on most wheel trades.
• Aggressive (0.35-0.45 delta): Bigger premiums, but assignment probability jumps sharply. Only do this if you genuinely want to own the shares at that price.

Use the expected move as your guardrail. Strike inside the 1 SD range? You're taking more risk than the implied range suggests. Strike outside the 2 SD range? The premium's probably too small to bother with.