Probability of Profit
calculate_probability_of_profitCalculate the probability of profit for option spreads and condors by applying N(d2)-based pricing to combined payoff. Input legs, stock price, and days to expiration to get a PoP percentage.
Instructions
Calculate the probability of profit for a set of option legs.
Uses N(d2)-based probabilities on the combined position payoff.
Use this tool when the user asks about:
Probability of profit / PoP for a trade
Odds a spread or condor expires profitable
Args: legs: JSON array of legs, e.g. '[{"option_type": "put", "action": "sell", "strike": 95, "iv": 32.5, "premium": 1.20, "quantity": 1}]' (iv accepts percent or decimal; premium is per share) stock_price: Current stock price days_to_exp: Days to expiration
Returns: Probability of profit percentage
Input Schema
| Name | Required | Description | Default |
|---|---|---|---|
| legs | Yes | ||
| days_to_exp | Yes | ||
| stock_price | Yes |