Trade Logic Unlocked

Expected Move Differentials

Trade Logic Unlocked

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

We lean heavily on the “expected move” in the market, but truth be told, there are multiple ways to measure this number. There’s the more formal way - that calculates the expected move straight from the Normal Distribution. Then, there’s the more informal way - that pulls the expected move straight off of the option prices themselves.

Today, we dive into each in detail, and we answer the question: which one should we use?

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