The simplified Expected Move formula “Stock Price ✕ (IV / 100) ✕ SquareRoot(N / 365)” allows for traders to easily calculate the market’s expectation for a particular stock to move a certain amount over any number of days. Remember, implied volatility is the driver of expected move, so when IV of a stock changes, so will the expected move.

Tom and Tony give an overview of how we can calculate expected move ourselves and how to incorporate into our options trading strategies.