The system determines that by expiration, the stock could rise to $62.94 or fall to $39.72. Potential profit of long (blue) and short (red) follows.

In this example, the stock's upside potential, $12.94, is greater than its downside potential of $10.28. This is reflected in the price indicator (pi), which shows the ratio of the potential up to potential down and the direction of bias, which is in favor of upside. Hence, pi = U1.26.

If the same ratio pertained the downside bias, pi would be D1.26. When the two sides are equal pi would be N1, which means neutral.

The greater the magnitude of pi, the greater the confidence that the stock will follow the direction indicated.

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