Volatility
Expected Move
Market's expected price range
What is Expected Move?
Expected Move The price range the market expects based on implied volatility. Calculated as stock price x IV x sqrt(DTE/365). Useful for setting strike selection.
Complete Definition
The price range the market expects based on implied volatility. Calculated as stock price x IV x sqrt(DTE/365). Useful for setting strike selection.
Example
Stock at $100, IV 30%, 30 DTE. Expected move = $100 x 0.30 x sqrt(30/365) = ~$8.60
Formula
Expected Move = Stock Price x IV x sqrt(DTE/365)
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