Analysis

Expected Value

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Probability-weighted average of all trade outcomes

What is Expected Value?

Expected Value The probability-weighted average of all possible outcomes of a trade. Calculated by multiplying each outcome by its probability and summing the results. A positive expected value means the trade is statistically profitable over many repetitions. Options traders should focus on expected value rather than individual trade outcomes.

Complete Definition

The probability-weighted average of all possible outcomes of a trade. Calculated by multiplying each outcome by its probability and summing the results. A positive expected value means the trade is statistically profitable over many repetitions. Options traders should focus on expected value rather than individual trade outcomes.

Example

A trade with 70% chance of making $100 and 30% chance of losing $200 has EV = (0.70 * $100) + (0.30 * -$200) = $70 - $60 = +$10.

Related Terms

Probability Of Profit Risk Reward Ratio Position Sizing

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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