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Volatility of P/L

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

The volatility of P/L of a particular strategy is calculated by taking the standard deviation of all historical ending P/L values.

The volatility of P/L answers the question “how close can we expect a single trade P/L to be to the historical average."

A lower volatility of P/L is means more consistency and predictability in the P/Ls of the strategy or trade

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