Expected Move Calculator
Visualize the expected price range implied by a stock's volatility.
Parameters
Expected Move
Enter parameters and calculate to see results.
Enter parameters and calculate to view P/L chart
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What Is Expected Move?
The expected move is a statistical estimate of how far a stock price could move over a given time period, based on its implied volatility (IV). It represents a one standard deviation range, meaning the stock is expected to stay within this range roughly 68% of the time.
The expected move is commonly used to compare the cost of options to the magnitude of the move they imply, and to frame the range of outcomes the market is pricing in.
The Formula
Expected Move = Stock Price × (IV / 100) × √(DTE / 365)
The IV / 100 converts implied volatility from its standard percentage format (e.g. 30%) to a decimal (0.30). If your IV is already in decimal form, skip this step.
The square root of time reflects the statistical property that price variance scales linearly with time, so the standard deviation (and expected move) scales with the square root of time. In practice, this means the expected move grows slower than linearly with time. Daily price changes partially cancel each other out, so 10x more time produces roughly 3.2x more expected movement, not 10x.
How to Read the Cone Chart
The cyan cone shows the expected range expanding over time. At day zero (left side), the range is zero—the stock is at its current price. As you move right toward expiration, the cone widens, showing how the expected range grows with more time.
The white dashed line is the current stock price (ATM). The upper and lower edges of the cone represent the one standard deviation bounds. Hover over the chart to see the exact upper and lower bounds at any point in time.
Using This Calculator
- Stock Price: The current price of the stock
- IV (%): The annualized implied volatility, found on your broker's option chain
- Days to Expiration: The time horizon you want to analyze
Practical Applications
- Strike selection: Use the expected move to choose strikes that are outside the expected range for short premium strategies, or within range for directional trades.
- Position sizing: Understand the dollar risk implied by the market before entering a trade.
- Earnings plays: Compare the expected move to the straddle price to assess whether the market is over- or under-pricing the event.
What Is Implied Volatility? — Full guide with examples
Related Calculators
- Options Pricing Calculator — Calculate theoretical prices and Greeks
- Implied Volatility Calculator — Derive IV from an option's market price
- Straddle Calculator — Analyze ATM straddle positions
