Expected move calculator (from IV or the straddle)
How far could this stock really move by Friday? The option prices already hold the market's answer. Type in the IV or the straddle and see the range — and how often the price ends up outside it.
How it works: from IV, the expected move is stock price × IV × √(days ÷ 365). That's one standard deviation: the model puts the price inside that range about 2 times in 3 by expiry, and outside it about 1 time in 3. Twice that range holds about 19 times in 20. From the straddle, add the call and the put at the strike nearest the stock price. The straddle is the size of an average move. Many broker platforms show 0.85 × the straddle as their "expected move", so you get both.
Why the range gets broken so often
One time in three is a lot. Sell options for a year and the price will land outside the expected move many times. That's not the math failing. That's the math working. Earnings, news and market-wide drops are all already inside the IV, and they still surprise people. A strike just outside the expected move is not a sure thing. The market prices it at about a 1-in-6 chance of ending past it on that side. See the expected move explained.
How sellers use it
In the wheel strategy, the expected move is a quick check on a strike. A put strike well inside the range will often be tested. A strike far outside it pays little. The straddle version is handy before earnings: the straddle price is the market's bill for the move it expects from the report. If the stock moves less, IV usually drops right after. That drop is called IV crush.
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