First enter a ticker and select a last trading day. The market defined Probability Distribution (PD) is built.
In the Probability Distribution Builder, grab the red bar in any price interval and pull it up if you believe there is a higher probability of the stock price ending up in that price interval at the expiration date specified. Pull it down if you believe there is a lesser probability of the stock price ending up in that interval at the expiration date specified. When you are satisfied with your custom PD, specify desired parameters, select the minimum number of legs you want in your option strategy and click Build Strategy.
The Strategy Scanner (in the panel below the PD Builder) will display three potential combination option strategies that complement your customized PD. For each strategy (and based on your custom PD) the selector displays the Expected Profit, Sharpe ratio (which shows the ratio of expected profit to variability of outcome), net Debit or Credit, percent likelihood of profit, max potential profit and loss and the associated probabilities, and the margin requirement if you were to trade the strategy.
More information on Probability Lab can be found in our Users' Guide.