GAMMA SONAR

OPTIONS RISK LAB

expectations, not predictions
Your expectancy per trade — the only equation that matters
(55%×+$450) − (45%×$300) = +$112 / trade

Your strategy inputs

$10,000
Total trading capital. Everything below scales off this.
$1.50
Price you pay per contract ($1.50 = $150, since 1 contract = 100 shares).
4
Position size. Watch the risk-per-trade tile grade this choice.
−33%
Where you cut the trade. 100% = holding to expire worthless. Don't be that person.
55%
% of trades that hit your profit target.
+50%
Where you take profit. +50% means the $150 contract sells for $225.
100
The equity curve rolls this many trades with your stats.
PROFITABLE
You need 40% wins to break even — you're at 55%.
Risk per trade
$200
2.0% of account — disciplined
Reward : Risk
1.5 : 1
avg winner ÷ avg loser
Breakeven win rate
40%
below this, the math eats you
Expected profit, 100 trades
+$11,200
+112% on account (expectancy × trades)

Simulated equity curve

Win rate needed vs. reward:risk

Educational tool. Simplified model: fixed % winners/losers, no commissions, slippage, assignment or IV crush. Not financial advice — the point is the math, not a signal.

How this options risk calculator works

Most losing options traders don't have a bad watchlist — they have bad math. This tool shows the three numbers that decide whether any options strategy makes money: risk per trade (contracts × premium × 100 × stop-loss %), reward-to-risk ratio (average winner ÷ stop loss), and win rate. Combined, they produce your expectancy — the average dollars you make or lose every time you click buy.

What is trading expectancy?

Expectancy is your average profit or loss per trade: (win rate × average winner) − (loss rate × average loser). If it's negative, taking more trades only loses money faster. The equation at the top of this page computes it live from your settings.

What win rate do I need to be profitable trading options?

It depends entirely on your reward-to-risk ratio. Breakeven win rate = 1 ÷ (1 + R:R). At 2:1 reward-to-risk you only need about 33% winners to break even; at 0.5:1 you need 67%. The second chart plots this curve with your strategy as a dot — profit lives above the line.

How do I size an options position from a stop loss?

Work backwards from the loss: risk per trade = contracts × premium × 100 × stop-loss %. Keeping that number around 1–2% of your account means a normal losing streak — which every strategy has — dents your equity curve instead of ending it. Hit re-roll on the simulator a few times to see how much variance a single strategy produces.