Expected value per trade
Definition · Level 3 · Spreads & short options
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The average result of one trade over many trades: win rate × average win − loss rate × average loss. It can be negative even when most trades win.
Example
Wins 85% of the time for +$100, loses 15% for −$700 → 85 − 105 = −$20 per trade.
Where Tradecraft teaches it
Level 3 · Spreads & short options, in the lesson “Probability vs payoff”: A high win rate is not an edge: breakeven win rate, expected value, probability of profit and delta as odds.
Related terms
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