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Probability of touch vs probability ITM: why your strike gets hit so often

Probability ITM is the chance the stock finishes past your strike at expiry. Probability of touch is the chance it reaches your strike at any point before then, which is about twice as high. Sellers should plan for the touch, because it happens far more often than assignment.

Comparison · 7-minute read · Updated 2026-11-09

The short answer

Probability ITM asks one question: where does the stock finish on expiry day? For a put you sold, it's the chance the stock ends below your strike.

Probability of touch asks a different one: does the stock reach your strike at any moment before expiry, even for an hour?

The touch chance is always higher, and roughly double. Picture the stock reaching your strike halfway through the trade. From there, it's close to a coin flip whether it ends above or below. So for every path that touches and stays, there's about one that touches and comes back.

That means most of the scary moments in a short put don't end in assignment. If you haven't planned for them, you'll be tempted to panic and close at the worst price.

Side by side

Three puts, two chances each (hypothetical)

Juniper Medical, a made-up stock, trades at $80. Implied volatility is 35%. You're looking at 45-day puts.

These chances come from a model: a lognormal random walk sized by today's IV, with no drift. It's the model behind our probability of touch calculator. It is not a forecast. Real stocks gap past strikes on news, with no "touch" in between.

Look at the $73 put, a 20-delta trade many sellers like. It finishes in the money about one time in four. But the stock reaches $73 at some point in about half of all trades. Half the time, you'll see your strike get hit.

The case: touched, closed, and then it recovered

You sell the $73 put for $1.15, so you collect $115.

Fifteen days later, Juniper slides to $73. Your put is now right at the money. Fear pushes IV up to 40%. With 30 days left, the put costs about $3.20 to buy back.

You panic and close. Loss: $3.20 − $1.15 = $2.05, so −$205.

Over the next month, Juniper drifts back to $78. The $73 put expires worthless. Had you held, you'd have kept the full $115.

That last row is the honest one. Holding isn't always right. If Juniper had kept falling to $65, you'd be assigned 100 shares at $73, worth $65: −$800 on the shares, plus $115 of premium, for −$685.

So the lesson isn't "never close." The model said there was a 48% chance of a touch and a 25% chance of finishing in the money. A touch was a normal event. The mistake was deciding what to do in the moment, at the scariest price.

Plan the touch before the trade

Before you sell the put, write one line: "If it touches my strike, I will ___." Most sellers pick one of these:

1. Hold. Only if you'd be glad to own 100 shares at that strike. In the wheel strategy, assignment is part of the plan.
2. Roll. Buy back the put and sell a later one, ideally for a net credit. Closing early vs rolling compares the two.
3. Close at a loss you set in advance. Some sellers use a fixed multiple of the premium. Decide the number before you trade, not during the drop.

Then size the trade so the touch doesn't scare you. If a 48% event would keep you up at night, the position is too big, or the strike is too close.

Which number should you watch?

Probability of assignment explained goes deeper on the in-the-money side. Delta vs probability of profit explains why delta is only a rough stand-in for these chances. And the options strategy comparison chart shows where short puts sit next to every other strategy.

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