Looking to calculate Probability of Profit for Options

#1

Good Evening,

I am looking for help on calculating the probability of profit for trading options. I would like to do this in R as my trading platform does not have this, and it would be rather cool to do in R.
The video in the link , http://ontt.tv/1C1Mhex , by tasty trade explains how to properly do this using the black Scholes model ( the first formula ) id prefer this method rather than the second method listed in the video as it is more accurate. Does anyone know how I can go about doing this. I am new to programming and this seems a bit advanced.. would some one be willing to code this for me in R. It would be much appreciated!!

#2

I'm not familiar with the models you're interested in, but it's possible someone else around here is. However, we generally encourage users to post their own attempts at coding and ask questions of the community where you get stuck.

If you're new to R, then the DataCamp tutorials are probably a good place to get your feet wet before trying a more advanced model.

2 Likes
#3

That is a very interesting topic. I have only done probability of profit of options under risk-neutral economy. I believe this should also be straightforward to do in R.

#4

I will be doing that thank you

#5

Would Probaility of Profit under a risk neutral economy be what they have in their second model outlined in the video? Essentially I would like to create my own tool like the TastyTrade platform has for POP. I think it will help me manage my trades more efficiently. I don't want to use tasty trade b/c I like the Thinkorswim platform is better in a few areas, but lacks the POP tool.