Free tool · Drawdown simulator · no signup
Drawdown and losing-streak simulator for options traders How bad can a bad run get?
Simulate thousands of possible paths from your win rate, average win and loss, position size and trade frequency to see how deep drawdowns and how long losing streaks can realistically get.Over 144 trades, half of the simulated accounts fell 12.4% or more below a previous high, and one in twenty fell 24.1% or more.
Typical max drawdown (median)
−12.4%
1 path in 20 falls at least
−24.1%
Longest losing streak, median
3 losses
95th percentile: 4 losses
Chance of a 20% drawdown or deeper
12.5%
Account after 24 months, median
$57,258
+14.5%
Paths ending below the start
22.0%
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Your inputs
Example values describe a wheel-style profile. Replace them with your own numbers. Everything runs in your browser with a fixed seed: the same inputs always give the same result.
A positive number: what a losing trade costs on average.
The capital one trade puts at risk — for a cash-secured put, its cash collateral: $12,500 at the start.
The simulator reports how often an account falls at least this far below a high.
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Your estimate
Each trade wins at your win rate, independently of the others. A win adds the average win and a loss removes the average loss, both measured on the capital at risk — your position size × the account at that moment — so results compound. Max drawdown is the deepest drop below a running high, checked after every trade.
What this means
2,500 paths · fixed seed 20261014
Half of the 2,500 simulated accounts fell 12.4% or more below a previous high at some point in 24 months; one in four fell 16.2% or more and one in twenty 24.1% or more. The worst path fell 39.7%.
The longest run of losses was 3 losses in a row on a typical path and 4 losses or more on one path in twenty (worst: 9 losses). At a win rate of 80%, streaks like these come from chance alone. 12.5% of paths had a drawdown of 20% or deeper.
After 24 months, the middle half of the accounts ended between $51,347 and $63,954 (median $57,258), and 22.0% ended below the $50,000 they started with.
On average a trade adds 0.40% of the capital at risk, and the break-even win rate is 76.9%: the drawdowns above are what that edge costs along the way, not proof that it is gone.
Simulated accounts over time
2,500 paths · shaded: the middle 50% and 90% of accountsMax drawdown across all paths
Share of paths by their deepest drop- Max drawdown, median
- -12.4%
- Max drawdown, 75th percentile
- -16.2%
- Max drawdown, 95th percentile
- -24.1%
- Longest losing streak, median
- 3 losses
- Longest losing streak, 95th percentile
- 4 losses
- Chance of a 20% drawdown or deeper
- 12.5%
- Account after 24 months, median
- $57,258
- Paths ending below the start
- 22.0%
- Average result per trade
- +0.40%
Worst path: -39.7%
Worst path: 9 losses in a row
5th–95th percentile: $43,814 to $73,877
Below the starting $50,000
Of the capital at risk · break-even win rate: 76.9%
Educational simulation only — not financial advice, a forecast or a recommendation. Real trades are not independent: in a sell-off several puts can be assigned at once, so real drawdowns can be deeper and losing streaks longer. Every win and loss uses the average size; fees, taxes, early closes, rolls and margin are not modeled.
Track your trades in a free YieldCove account: your real win rate, average win and average loss are measured for you, ready to bring back here.
Track your trades free in YieldCove03
Worked example
The default scenario, computed with this tool’s own math — replace the inputs above with your trade.
A wheel-style profile wins 80% of its trades, keeping 3% of the capital at risk on a win and losing 10% on a loss, with 25% of a $50,000 account at risk per trade, 6 trades a month for 24 months. Each trade earns 0.4% of the capital at risk on average, yet across 2,500 simulated paths the median max drawdown is 12.4%, one path in twenty falls 24.1% or more, and 22.0% of paths end below where they started.
- Max drawdown, median
- -12.4%
- Max drawdown, 95th percentile
- -24.1%
- Longest losing streak, median
- 3 losses
- Chance of a 20% drawdown or deeper
- 12.5%
- Account after 24 months, median
- $57,258
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Common questions
What the numbers mean — and what they leave out.
- What is a drawdown, and why does it matter for the wheel?
- A drawdown is the drop from the account’s highest value to a later low, in percent. Selling cash-secured puts and covered calls wins often but loses more when it loses, so a few losses close together can erase months of premium. Knowing the drawdown to expect helps you pick a position size you can stick with.
- How long can a losing streak get with a high win rate?
- Longer than it feels like it should. Even at an 80% win rate, three or four losses in a row are common over 150 trades, and some paths see six or more. Real trades are not fully independent either: in a market sell-off, several positions can lose at the same time.
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The rest of the workbench
Every free tool, one click away — plus the terms behind these numbers.
Next steps
Plan the trade before you place it: the position size calculator shows how many shares or contracts fit your risk, the options profit calculator draws the payoff at expiry, the risk/reward calculator weighs the target against the stop, and the drawdown simulator shows how deep a run of losses can go. New to options? Start with the free lessons Why sell options instead of buy them, Reading an options chain and The Greeks, in plain English.
Terms behind the numbers
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Keep going
Priced a trade? Track it for real, or learn the ideas behind the numbers.
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Educational only — not financial advice.