Module 6 · Lesson 30 · 10 min

Occurrences, not a forecast

What you'll be able to do

  • Calculate the expected value of a capped-loss option trade from its win rate, average win and average loss.
  • Find the break-even win rate, and show how a few points of error change the result.
  • Explain why a run of trades can lose money even when the expected value is positive.

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