https://optionalpha.com - Finding great option trades was often tough and time-consuming, digging through option chains, manually pricing trades, and calculating probabilities. Even if you could find great, positive expected value (EV) trades, then the question becomes, "should you always take the highest EV trade?" Today, I'll help answer this question and present the 'Alpha' metric as an alternative to help find better trades by normalizing the EV by max risk on option positions.

Alpha performance research: https://optionalpha.com/blog/evaluati...

Research on EV calculation accuracy: https://optionalpha.com/blog/how-to-c...

Expected vs. realized P/L performance: https://optionalpha.com/blog/trade-id...

Research on performance of probabilities and DTE ranges: https://optionalpha.com/blog/trade-id...

Technical docs on how we calculate EV and Alpha: https://optionalpha.com/help/understa...