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Option Expected Move Calculator

Isolate Implied Volatility (IV) to estimate the expected dollar move of a stock leading up to expiration.

Stop guessing how much a stock drops after earnings.

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The Expected Move Formula

This calculator uses core pricing models to heavily isolate Implied Volatility (IV). To approximate the expected move of a stock based on its current IV, we use:

Expected Move ≈ Price * (IV / 100) * SQRT(Days_to_Expiration / 365)

How it’s used

You input the current stock price and days until an option expires. Then, use the slider to adjust the Implied Volatility to see practically how high or low the market is pricing the move.

Why it matters

It highlights the absolute danger of “IV Crush.” If you buy an option right before earnings, the IV is extremely high. Following the earnings call, the market digests the news and IV immediately plunges.

Even if the stock moves in your intended direction, the sharp drop in IV can drastically reduce the option premium’s value. This calculator helps you recognize those overpriced conditions and strategize around actually shorting volatility rather than blindly buying right into it.

Frequently Asked Questions

Implied Volatility represents the market's forecast of a likely movement in a security's price. Higher IV means higher expected swings.
IV crush occurs when implied volatility drops dramatically after a known catalyst (like an earnings report). Even if the stock moves favorably, your option's value can plummet.

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