All termsRisk, Position Sizing and Trade ManagementWorth knowing
Probability of Touch
Probability of touch is a model based estimate of the probability that the underlying price will reach a specified price level at some point before expiration.
Why it matters to you
Touching a strike before expiration and finishing beyond that strike at expiration are different events. This distinction is especially important when traders confuse: probability of touch with probability of expiring ITM.