Expected move

The expected move tells you how much room a trade’s strikes have. If a short strike sits inside the shaded 68% band, the model puts it within one standard move of today’s price.

Expected move

One expected move (one standard move) is spot × at-the-money IV × √(years to the front expiration’s close). About 68% of outcomes fall within one move of spot and 95% within two, if the distribution is right. The risk graph and the chain both show it.

12

The 68% and 95% bands on the Sep 23 iron condor's graph, and the PoP they match.

1. 1 PoP, same distribution as the bands
2. 2 Curves at the band's spot

On the risk graph

The Expected move layer shades the range that holds 68% of the modeled prices and a fainter range for 95%, labeled “68%” and “95%”. It uses the same distribution as PoP, so on a smile the bands are not symmetric. It uses the front expiration only.

• Turn it on or off in Risk graph settings → Layers → Expected move, or in the right-click menu. It is on by default and applies to every graph.
• The PoP tooltip also gives the move in points, “One standard move: ±…”.

On the chain

The chain’s settings popover → Layers → Implied price distribution shades strikes by the expected move and shows “±N” beside each expiration in the expiration picker (hover: “Expected move (±1σ) by this expiration”). The chain uses the expiration’s own at-the-money IV and a 365-day year, so it can differ slightly from the graph’s front-expiration figure. See Option chain.