Expected move
The move the options market prices in for a period: price × IV × √(days / 252). Example: stock at $200, IV 30%, 25 trading days → roughly ± $19.
The formula, step by step
Expected move ≈ stock price × IV × √(trading days ÷ 252)
Example: stock at $200, IV 30 %, 25 trading days. √(25 ÷ 252) ≈ 0.315. $200 × 0.30 × 0.315 ≈ $18.90. The options market prices a range of roughly $181 to $219 for that period.
252 is the usual number of trading days per year. IV is quoted as a yearly figure, the square root scales it down to your period.
How to read it
The expected move is a one standard deviation range. Under the model's assumptions the stock ends inside it in about two out of three cases. It is not a price target and says nothing about direction.
For buyers it is a reality check: if a call only becomes profitable with a move far beyond the expected move, the option is expensive for the idea. Before earnings the expected move is often large, which is exactly what makes those options pricey (IV crush).
Common mistakes
- Using calendar days with 252. Use trading days with 252, or calendar days with 365, not a mix.
- Treating the range as a guarantee. In about one case in three the stock ends outside it, sometimes far outside.
- Using historical volatility instead of IV. Historical volatility describes the past; the expected move is about what the market prices for the future.
Frequently asked questions
How do you calculate the expected move of a stock?
Multiply the stock price by implied volatility and by the square root of trading days divided by 252. A $200 stock with IV of 30 % has an expected move of about $18.90 over 25 trading days.
How does the screener use the expected move?
It sets the stock's price target for the holding period and helps put strikes into context.
See it in the screener
The live demo shows every term with example data, right next to the score and its reasons.