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Adjusting Inputs of Probability of Profit

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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 probability of profit (POP) for both defined and undefined risk is easily calculated once the delta of the short strike has been determined.

When we place a trade, we are mindful to adjust the probability of profit to fit our desired targets.

For higher pop trades we use lower deltas and undefined risk.

For lower POP we can increase deltas or adjust the wings.

Join Tom and Tony as they dig even deeper into the world of POP.

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