Paid Daily · Resources · Ask Plutus
Tom Preston Explains the Options Metric He Invented 25 Years Ago
NowPress play to follow along0:00 / 9:45
Chapters5 segments · tap to seek
ticker lesson
Breakdown
0:00lesson
Probability of touching explained
- Probability of touching = chance stock hits a price between now and expiration
- Example: Meta 650 puts have 46% touch probability
- Touch percent is different from delta or regular probability
2:23lesson
Using probability of touching for trade decisions
- Short 650 puts have 77% chance of expiring worthless
- If stock drops below 650, put becomes in the money
- Probability of touching helps decide when to exit a trade
4:38lesson
Probability of touching for losing trades
- Sold 800-805 put spread, stock drops
- Probability of Meta rallying to 800 is 35%
- Probability of touching helps assess recovery chances
6:56lesson
Extending time increases probability of touching
- Probability of touching 800 strike increases to 44% with 63 days
- More time = higher chance of larger price moves
- Probability of touching is theoretical, not guaranteed
9:03lesson
Using probability of touching in trading
- 20% probability of Meta touching 600 is low
- Probability of touching helps assess trade viability
- Use probability of touching as a tool, not a guarantee
Informational only — this is tastylive’s content, decoded by Plutus. Not Paid Daily’s advice or a recommendation. The outline, timestamps, and claims are extracted from what the creator said; verify before acting.