A Free Probability Calculator for Options Traders

By Lawrence G. McMillan

We recently upgraded our Free Probability Calculator, making it an even more useful tool for traders who want a deeper understanding of market expectations. The calculator helps estimate the probability of a stock finishing above or below a target price by expiration—a powerful perspective when evaluating strategies such as covered call writing, naked put-selling, or directional trades.

New Feature: Built-In Volatility Lookup

One of the most valuable enhancements is the Volatility Lookup tool. Instead of hunting down historical volatility data or switching between screens, traders can now:

• Enter the stock, index, or futures symbol
• Automatically retrieve the HV100 (100-day historical volatility) from free weekly volatility data
• Have that volatility instantly filled into the calculator

This speeds up workflow and provides consistency, especially for traders evaluating multiple strike/expiration scenarios.

How It Helps Covered Call Writers

Covered call traders often ask: “What are the odds my stock will still be below my strike at expiration?”

The Probability Calculator answers that directly. By inputting:

• Stock price
• Target strike
• Volatility
• Days to expiration

You can quickly estimate whether the option you’re selling has a high or low likelihood of finishing in-the-money. This can help you:

• Select strikes aligned with your income or assignment goals
• Compare covered call returns vs. risk
• Avoid strikes with higher assignment probability than expected

For a deeper dive into how probabilities fit into a structured covered call approach, see our webinar and article: Covered Call Writing Webinar

How Put-Sellers Can Benefit

Naked put-selling relies on understanding the likelihood that a stock will finish above the put strike. The calculator makes this intuitive: plug in the numbers, and it instantly displays the probability of the stock remaining above your strike (i.e., avoiding assignment).

This helps traders:

• Identify favorable risk/reward strike prices
• Compare probabilities across expirations
• Avoid writing puts where the implied risk is higher than assumed

To learn more about how we approach premium-selling with a systematic framework, read my recent article: A Smarter Approach to Put-Selling

A Simple but Powerful Tool

The calculator is intentionally minimal—it doesn’t replace full modeling software, but it gives traders a fast, data-driven way to supplement decision-making. Whether you’re evaluating:

• Covered calls
• Cash-secured puts
• Traditional directional trades
• Or simply exploring volatility-based price distributions

…it provides a valuable snapshot of probability and risk.

Try the updated version here: