A worked example
At entry ₹100, stop ₹80 and target ₹140, 50 units have a planned stop loss of ₹1,000 and target profit of ₹2,000 before costs. That is ₹2 of reward for ₹1 of planned loss.
How the calculation works
Planned loss = (entry − stop) × quantity + costs. Target P&L = (target − entry) × quantity − costs. The break-even win rate assumes every losing trade reaches the entered stop and every winning trade reaches the entered target, with the same costs. It is arithmetic, not a forecast.
What the result does not tell you
For bought options only, with stop below entry and target above entry. A stop is not a guaranteed fill or a maximum loss. Gaps, stale quotes and slippage can increase losses. A high ratio says nothing about the probability of reaching a target.
The values are educational calculations, not personal investment advice. Read the simulation disclaimer.