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Expected Move Calculation

From Theory To Practice

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Formal finance education desperately needs to be refreshed. The Sharpe Ratio from Modern Portfolio Theory is where students normally see how risk and return are connected, but applying that theory into practice is very difficult to do. That's where a calculation like an expected move is so powerful for an investor. It allows you to establish price ranges that can then be used to structure your trades and position your strategies.

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