What is implied move?

The implied move is the size of the price swing the options market expects for a stock by a given expiration, shown as a plus or minus percentage. It is the market's own estimate of how much a stock will move, most often read around an earnings report.

How it is calculated

The quickest estimate is the at-the-money straddle: add the price of the call and the put at the current stock price for the expiration you care about, and divide by the stock price. That percentage is roughly the one-standard-deviation move the options are pricing in. So if a $100 stock's nearest weekly straddle costs $8, the implied move is about plus or minus 8 percent by that expiration. Under the hood it all comes from implied volatility, which spikes into events and decays after.

Why it matters

• Earnings. It tells you how big a reaction the market is braced for, so a report can be a non-event or a shock relative to what was priced.
• Position sizing. Knowing the expected swing helps you size risk and set expectations before a catalyst.
• Expensive vs cheap. Comparing the implied move to how the stock has actually moved on past reports shows whether options are pricing too much fear or too little.

Its limits

Because it is one standard deviation, the stock stays within the implied move most of the time but breaks it a meaningful share of the time, and genuine surprises blow through it. It also assumes the options are priced efficiently. Treat it as a well-informed expectation to compare against, not a boundary the price has to respect.

FAQ

What is implied move in options?

The size of the swing the options market expects by a given expiration, as a plus or minus percentage, driven by implied volatility.

How do you calculate the expected move?

A quick estimate is the at-the-money straddle price divided by the stock price, giving the roughly one standard deviation move.

Is it accurate?

It is an expectation, not a forecast. Realized moves usually land inside it but not always, and it says nothing about direction.