Calculation and mechanics
All trades with a positive result are counted and divided by the total number of closed trades. Trades with a result of exactly zero count in the total but are treated neither as winners nor as losers. Whether fees and commissions are already included can decide whether a narrow trade counts as a gain or a loss.
What counts as a single trade matters too. When a position is closed in several steps or an option is rolled several times, the same position can appear as one trade or as several, depending on the evaluation logic. This can change the win rate.
With small samples the rate fluctuates strongly. With 20 trades a single trade moves the win rate by five percentage points, with 100 trades only by one.
Win rate = number of winners / number of trades x 100
Distinction
The win rate only describes how often trades win. The Profit factor and Expectancy also take the size of gains and losses into account. A win rate of 90% can therefore still come with a negative expectancy when a few large losses exceed the many small gains.
The win rate is not the same as the estimated probability that an option expires worthless. That probability is derived from option prices before entry, while the win rate measures the results actually achieved afterwards.
Related terms
- Profit factor (PF)
- Expectancy (Average result per trade, expected value)
- R-multiple (R, result in R)
- Max drawdown (Maximum drawdown, MDD, time in drawdown)
All market and analytical information is provided for educational and analytical purposes only and does not constitute investment advice or a trading recommendation.