How To Calculate Expected Move for Stocks | Trading Tutorials

[@mikebenfield8618]

Matt - whatever you do, never chnage your teaching style!

[@TradeBrigade]

Thanks for the compliment Mike! Hope you have great success with the expected move

[@TWENTYELBRIDGE]

Forget trading this guy is an insane quality teacher holy crap

[@TradeBrigade]

I appreciate the comment Twenty!! Thanks for tuning in and taking the time to leave some feedback. Wising you nothing but success in your trading journey.

[@MalibuJamie]

You did such a great job of explaining these techniques, Matt. Can’t believe I put off watching this video until now. 👍

[@TradeBrigade]

Thanks Jamie! hope all is well in your world. Enjoy the long weekend, and have a great trading week!!

[@allhallowseve6549]

Did I use this method to calculate this week's price range on $QQQ? Yes! Did I get a bottom of 422.28? Yes! Did I buy calls heading into NVDA earnings with some confidence when reversed off of 422? Yes! Whew! So glad I found this! Thank you!

[@TradeBrigade]

Cheers! Thanks for checking out the tutorial

[@Ball_Hard]

What does get a bottom of 422$ mean? Bottom?

[@allhallowseve6549]

@Ball_Hard it means when I used the method to calculate the weekly range for QQQ the calculations said the bottom (for that week) were 422.28.

[@S1lv3rdo7]

Hands down the best video made on the topic. This one video can change a traders life. Yet another reason to use ToS. Sharing this video everywhere. Well done!

[@TradeBrigade]

Really appreciate that feedback Kenneth! Thank you for taking the time to leave a comment and share. Wishing you the best this week

[@wendypiatek7208]

Thanks!

[@TradeBrigade]

You got it Wendy! Thanks for tuning in and the donation. Hope you are finding success in your trading journey.

[@mikebenfield8618]

Matt - this worked the first time I ever tried it! Marked the SPX expected move on March 1st for March 8th and it hit the lower range mark of 5073.55 today (Tuesday) and then it dropped down 6 more points and hit the 16 delta of 5060. UNREAL!

[@TradeBrigade]

Pretty cool how it all comes together to work ehh!?

[@happylung77]

to the point and very clear. This is the best video made on the topic

[@TradeBrigade]

Appreciate it! thanks for taking the time to leave some positive feedback.

[@JimRobitailleMusic]

Thanks Matt. I have watched this video three times, and is great for gaining more information when looking into option trades even though TOS gives you the calculation for the first two methods. I like using the third one for adding that IV deviation range.

[@TradeBrigade]

Its so awesome to have that as a back pocket idea and measure. Of course on any expiration series as well!

[@EliteTraders777]

Thank you Matt. I really appreciate you taking the time to make this video. Love your channel. I’m always anxiously awaiting your further videos.

[@EliteTraders777]

I don’t know how you’re so good with the annotation tool. Is there any tricks. My drawings always look awful

[@TradeBrigade]

@@EliteTraders777 HA! Thanks for tuning in. In regard to the annotations, its a separate screen presentation app called Demo Pro.

[@EliteTraders777]

@@TradeBrigade that’s the one I have too. But seems like I can’t draw anything always looks sloppy lol

[@TheKnightlight6]

Hey there - new to your channel and relatively new to the realm of trading. I found myself in this world via the meme stock madness - your content is a league above the videos I've relied on as learning tutorials. Just wanted to say thank you and that I hope you continue doing this!

[@TradeBrigade]

Thanks for stopping by Wayne. Appreciate you taking the time to drop a comment and some feedback. Glad to hear the tutorial proved useful, and wishing you the best in your trading endeavors.

[@peteandrepete817]

Great stuff as always Matt. Started incorporating this a couple of weeks ago and has really helped!

[@TradeBrigade]

Great to hear! I found it to be increasingly useful as we were making the descent into relatively unchartered territories. Helps gauge how strong / probable old levels might be for the upcoming week. Keep it up Peter and wishing you a great week upcoming.

[@jroldan3515]

Love this, another way to keep an eye out on probabilities and building a thesis

[@TradeBrigade]

Absolutely! All about gathering context and this is a key piece!

[@ShawAnthoni]

Thank you kindly Sir

[@TradeBrigade]

MY pleasure Shawn, thanks for taking the time to check out the tutorial

[@sharmaaj]

great video. simple, to the point, and thorough.

[@TradeBrigade]

Cheers! thanks for checking out the tutorial and taking the time to leave a comment. Hope you have nothing but success with the methods.

[@Scharades288]

Awesome video! Concise and full of info. Thank you!

[@TradeBrigade]

Thanks for tuning in Greg! Hope this can be of use in your trading journey. Cheers!

[@chestergodin7529]

You are an astounding teacher.

[@TradeBrigade]

Cheers! thanks for checking out the video!

[@bignicnrg3856]

Love the tutorial!! Great video!! 👍

[@TradeBrigade]

Thanks for stopping by! Appreciate you taking the time to drop a comment

[@ryanspeed4671]

Enjoyed the video and I really appreciate the content. Very helpful!!!!

[@TradeBrigade]

Thanks as always for tuning in Ryan! Glad this proved useful

[@ScruffyWarlord]

Great video on expected move. Thank you.

[@TradeBrigade]

You bet! Thanks for leaving a comment

[@kennethwedmorelund]

What a great video ! Thanks for taking the time to do this !

[@RoaringSpaceQueen]

Thank you Matt !! Great lesson. Very detailed. I'm gonna need to watch this about 10-20x to absorb it all.

[@TradeBrigade]

Cheers Rebecca! Hope this helps frame some context about when we talk about the weeks expected move

[@Tay-k6k]

I usually don’t leave comments but I must say…that was perfectly explained! Thank you❤

[@TradeBrigade]

Cheers! thanks for checking out the tutorial!

[@diannejudd4957]

I love all the good information here you're appreciated 😅

[@TradeBrigade]

Appreciate you checking out the tutorial Dianne. Hope this becomes a useful tool in your analysis arsenal

[@alanhill6852]

I was so hoping you were going to make a video of this. You are a wizard!

[@TradeBrigade]

Cheers Alan! Thanks for tuning in and glad it was helpful.

[@jonathanlance2166]

Great video. The world of statistics revisited. Thanks.

[@TradeBrigade]

You got it Jonathan! Appreciate you tuning in

[@TheRollingLaxx]

Does this work for daily expected moves, or do you focus on weekly moves? Thanks for the great vid!

[@TradeBrigade]

I personally focus on the weekly, however if theres an expiration for it it should work. You can do this for the Monday SPY series and come up with a ~4.4ish expected move which is close to the ToS 4.7 expected move.

[@ferndadivitan]

I knew about the ToS +/- (at the top right corner), and have used it pricing my options sells but never been explained so clearly. Also, I've factored in Delta on my options buys (.70) and sells (.30), but never went beyond those two parameters. Your discussion about the .16 Delta is brilliant (and smart!). You're a natural teacher! Thank you! Question: If I wanted to expand or contract that 68% level, do I adjust the straddle and strangle strike prices? Say, I wanted to increase my probability from 68% to 80%, how would I do that? and vice versa, be aggressive and decrease the probability from 68% to any lower %? Thank you!

[@TradeBrigade]

Glad to hear it was useful! Thanks for dropping some feedback from that perspective. In terms of your question, the math doesn't work in a linear fashion as the curves are parabolic so Im not entirely sure what multiple you would need to achieve an 80% or a 50% depending on if you wanted to be more or less accurate. Something that might work would be to assess the IV on the chain for the expiration you are looking for and adjust based on that. I know the basic math, but not the in the weeds stuff!

[@r.a.clifton9224]

Excellent video

[@TradeBrigade]

Appreciate that RA! Thanks for tuning in and taking the time to leave some feedback

[@RixCanDoit]

Nice. Thank you.

[@brianleblanc2758]

interesting. I downloaded this just now. You really are great to learn from.

[@TradeBrigade]

Glad it was helpful! I use it every week to get the expected move discussed in the WW video.

[@charlesclark667]

Hey buddy great job I have always been curious on how to get the expected move, but in that apple example using the 16 Delta method if you add strike 150 +152.50= 302.5/2 = 151.25 on the upside everything else is spot on and I love the straddle method, thx for your teachings.

[@TradeBrigade]

You got it!

[@MalikAli-oq1wi]

❤❤ very nice no one tells this true teacher highly appreciated came to ur channel first time subscribed the channel thank u

[@TradeBrigade]

Cheers!

[@TrikkyMF]

Nice video. still going back through the catalog and getting all the gems.

[@TradeBrigade]

Appreciate you checking out the tutorials. Hope this serves you well in the near future

[@tateconsulting6486]

Can’t say any better than Wayne’s statements. Thank you, Matt

[@TradeBrigade]

You bet Tate!

[@Mervin3546]

Love this. While I have thinkorswim , understanding the math made it even more useful for me.

[@TradeBrigade]

Great to hear! Wishing you the best this upcoming week. Just put out the weekly watchlist video with lots of thoughts!

[@tjfintrade]

Thank you! This is amazing. I've been looking for something like this for 2 years I wish I would have found this video a long time ago. How do you then calculate the two sigma lines?

[@kingal89]

Just multiply by two. He is showing how to calculate a 1 sigma move. 1 sigma = 1 stdv which means 68% of the time price will fall within +/- 1 sigma. Just multiply by two and you have DOUBLE the range. Based on normal distribution 95% of the time price will fall within 2 sigma.

[@RJ-xr1ne]

​@@kingal89Thanks!

[@RJ-xr1ne]

​@@kingal89Thanks!

[@orlandoo9298]

Excellent video. To calculate the expected move of the intraday spx, what we must do is choose the contract in the options chain of the current day and that's it?

[@TradeBrigade]

Correct!

[@bbwphantom]

Thank you again for a video that makes trading easier (makes more sense)

[@TradeBrigade]

My pleasure! Appreciate you tuning into them

[@mrwonderful626]

Thanks Matt. You’re Fire!

[@TradeBrigade]

Appreciate it!!

[@Consistent_Investor]

Explained perfectly as always! Thank you 💯🎯🐐

[@TradeBrigade]

Cheers! Thanks for checking out some of the tutorials this weekend CI. Hope you have a great long weekend,

[@rthom]

Pretty interesting video. Have you done any testing to see which of the three methods tend to be more accurate? Or do you have any scenarios where you may use one method over another?

[@TradeBrigade]

The second method of taking the average between the at the money straddle and first in the money straddle is the most accurate to the ToS calculations.

[@alfsilva]

Excellent video on the topic. I would say the best

[@TradeBrigade]

Thanks Alfredo!

[@craigthompson8183]

excellent tutorial - thank you!

[@TradeBrigade]

You're very welcome!

[@khalidjaii2]

Thank you sir. Well Done!

[@TradeBrigade]

Cheers! Thanks for tuning in!

[@guanocoterepaima5288]

This guy is a beast! a freaking beast

[@NareshSen]

Thank you for the wonderful share.

[@adamn3837]

Great video! Thank you! How do you determine if the option data is liquid enough to use for these calculations? Do you look at bid ask spread, volume, open interest, or something else? And what is the minimum amount of this metric needed for the expected move to be accurate?

[@TradeBrigade]

Hey Adam, I would say that in my experience its okay to use on things that trade 2k plus in options volume per strike. Anything less than that starts to get pretty thin and would start to impact the read. That being said, my criteria to trade anything is a minimum of 2k plus in options volume on a given strike, so I have not experimented much with these methods out side of that data set. Trading AAPL, AMZN, META, MSFT... these are all plenty liquid.

[@MertikTrades]

Gr8 video! Definitely learned a lot here. I think the AAPL one was skewed cause you went up to 153 when I think it should've been 151.75 (rough estimate of the middle 152.50 and 150 strikes)

[@TradeBrigade]

Thanks Mertik!

[@tessjones5987]

Thank you professor.

[@TradeBrigade]

You bet! Thanks for checking out the tutorial. Have a green trading week

[@ChungPeng]

great explanation! just wondering why people don't just use the .34 delta on calls/puts to calculate the 1 deviation expected move? this also often shows a skew to the up or downside

[@typhanie0612]

Thank you for these videos and the premarket prep. Incredibly helpful. I wish you could also do a EOD video to recap the day :)

[@TradeBrigade]

Thats a whole lotta videos! Maybe if the schedule permits in the future.

[@typhanie0612]

@@TradeBrigade LOL. I was just kidding. Thank you for all the time you take for these videos. It's immensely helpful and I'm learning a lot. I just wish I was better at applying the knowledge.

[@Johnadam0524]

Matt, thanks for this video. Very cool. Do you feel these Lines are stronger or weaker than support and resistance lines? Just interested to hear how you use them in conjunction. Thanks!

[@TradeBrigade]

I would say it might be equally as strong, however the best part about it is as I mentioned towards the end of the video, establishing some context for the move that has unfolded throughout the course of the week. Are we within the markets expectations? Or far surpassing them.

[@ChrisS-if7ev]

Well done. Looks like the move you plotted took it to I am guessing 2 deviations but lots of cool tips in this video. I always worried, what if Think or Swim stopped displaying the information, now I know how to find it without them if that ever happened. Thanks again!

[@TradeBrigade]

Lets hope they never stop displaying the calc, but youre 100% right, we have backups!

[@FanMusicIndian]

Great Video and tips to calculate the EM. What would be the way to calculate intraday EM for Options series. Thanks in advance.

[@TradeBrigade]

Same calculation but on the fly. No auto generated one from ToS.

[@jessew8568]

Thank you I was trying to figure this out so I know the best price to sell call options. But it seems like the options market is often wrong but you mention 68% of the time it's correct.

[@TradeBrigade]

No free lunch! The further you go out, the less premium you will receive. The key is using technical levels in conjunction with the options chain.

[@mikebenfield8618]

Hi Matt - question that I meant to ask the other day - do you change the lines for the .16 delta as the week goes on or do you keep them static for the next Friday all week?

[@TradeBrigade]

Nope! Static once set ahead of the week

[@underratednerd8259]

great video !! thank you.

[@TradeBrigade]

You bet! thanks for tuning in

[@onlineputhakkar859]

Can you use this method to sell credit weekly iron condors ?

[@TradeBrigade]

You can, but you wont get much credit outside of the expected move. The options market wont reward you for "playing it safe"

[@popcycles]

5:50 in your video you say you buy the ask of the call, and the ask of the put. It totals 9.91 in your video. But that is incorrect. It appears you're buying the BID of the put side. Is there a reason for this?

[@TradeBrigade]

Its taking the "mid" of the spread not the "nat" which would be the pure math to get to 9.94

[@popcycles]

​@@TradeBrigadeahh okay. That had me 😂. Thanks.

[@kustiink9057]

Great video. Never heard of the 16-delta method. One quick question: If my short-term trend sentiment is bullish, can I expand the upper limit to include 1STD+13.5%+2.5% to the upside to give me 84% probability? Vice versa for the Bearish sentiment?

[@TradeBrigade]

Im not an applied math genius so I dont want to misguide you with the wrong answer here. I do know that doubling the expected move will be representative of 2STD (on either side of the closing print 4STD in total) which is pretty darn close to 95% probability.

[@Frank50505]

Awesome clip.

[@TradeBrigade]

Cheers! thanks for coming out to the show.

[@peleliuvet]

excellent, thank you.

[@TradeBrigade]

You are welcome! Enjoy the tutorial

[@couchpotato684]

Thanks.

[@TradeBrigade]

Always a pleasure Couch

[@dansweeney8261]

how do i create up or down arrows on the stock chart indicating a buy or a sell action

[@TradeBrigade]

Can you elaborate? What is the criteria for the up and down arrow? Are you trying to programmatically code this? Do you want to draw them manually?

[@oneguy.2046]

Thank you so much for your teaching and explanation !! If I don't have TOS unfortunately but only have other brokers' platform like IBKR or Schwab, will this mean that I can only be able to calculate the expected move by using method 1 - At the money straddle? or I miss anything from your teaching? Your advice and feedback is much appreciated. Thank you : )

[@TradeBrigade]

You are correct. Use the at the money straddle or the method which also accounts for the first in the money strangle.

[@ChungPeng]

with the $aapl example where the price was at 145.38 - to calculate the price manually, you added a strangle (1st ITM call and put) , which I think should have been a 145 call and 146 put... but on the vid you added a 144 call and 145 put - is that correct or am I missing something?

[@Inf]

BASED brigade with the based video

[@TradeBrigade]

You already know the deal

[@VeritasAmantesVocat]

So, the expected move, shown on TOS, is 1 standard deviation?

[@naples1161]

Hi Matt: I notice that you have layout as "Delta, Probability ITM, Probability....?" up on the top for the option chain. I do not know how to trade options but am trying to figure out the expected move using this. When I use drop down menu, it doesn't have anything that looks like that. otm, delta, etc. Can you please show which parameters you're using so I can input it as you show in your video. Thanks so much.

[@naples1161]

It may not matter. I'm trying it as a straddle and coming up w same number. For this week, using Friday's close of 396.38, I came up w expected move of $7.50 if I rounded down and used March 3's 396 strike price since under .50 cents. Trying to figure out. Your videos are incredibly helpful.

[@TradeBrigade]

Hey Kelly, seems like your doing it properly. The dropdown has no impact on the way you would actually price out the straddles as long as you have the bid and ask showing. The "greeks" are just more metrics to measure options with.

[@SmitMehta-qh2jv]

Hi Matt, Thanks for the great lesson. How can I trade monthly expiry, should it be strictly for 31 days or 28 days are fine too .?

[@TradeBrigade]

Either one works.. theres only a 3 day difference

[@SmitMehta-qh2jv]

@@TradeBrigade Thank You so much.

[@_VlCTOR_]

thanks for the video

[@TradeBrigade]

You bet!

[@marcknight9334]

Any way to add it next the option IV in IBKR without having to calculate all the time? Thanks

[@TradeBrigade]

Not that I know of. This is a Think or Swim specific calculation. Perhaps there have been some updates to IBKR, but I do not currently use the platform so cant speak to its updates or lack thereof.

[@ptahX]

Awesome 👌

[@TradeBrigade]

Appreciate you coming out to the tutorial! Hope you use it to have a wonderful trading week!

[@lloyddinma9944]

Hi! For the QQQ, (before factoring the ITM strangles,) I get 5.33 = 4.94 to get 10.26. Your value on the screen is 10.19. Can you please explain?

[@christ7199]

Couldn't we use the 14 ATR as well?

[@TradeBrigade]

I've never used that method. A quick check seems to be not quite the same as the weekly. The ATR should just be an average of the prior data, not a projection of volatility.

[@ricklarsen7477]

Amazing.

[@TradeBrigade]

Thanks for checking it out Rick!

[@blackbean2290]

Why the ~delta is 16? any explanation on that? Thanks

[@TradeBrigade]

Its just how the math works. A 16 delta represents 86% probability of closing OTM.

[@justzankz7621]

I understood how to calculate but how did you place that on chart level? Why it wasn’t started Friday high or low or open close ? How do you use that levels

[@TradeBrigade]

Manually drawn in with the drawing tools: kzbin.info/www/bejne/maack5yba6qnbtk

[@justzankz7621]

@@TradeBrigade I got that part but I mean how do you choose the highs drawing point? In video we saw spys expected move 10$ but when manually drawing where is the starting the high and lows ?

[@infiniti3787]

How calculate de expected move only for the current day?

[@TradeBrigade]

Now that options have daily expirations in the SPY / QQQ just use the daily expiration for this instead of the Friday.

[@FrizzTradez]

How can I convert Expected moves to ES futures? Would I have to use the options on futures? I'm not sure If that would make a difference. TYSM

[@TradeBrigade]

/ES futures have an options market so just use the options expected move there. There is the expected move on Think or Swim, or from any chain you can use the second two methods covered in this video.

[@FrizzTradez]

@@TradeBrigade since futures are trading 24/6 would it be best to take the expected move right before open or right after a session close? TYSM for the quick response you just got a sub ❤️

[@geauxfibonacci]

Does this apply to calculating for earnings as well ? 🤓 I know this may seem like a dumb question but I need confirmation .

[@CarlosNoyola]

Great content Matt. Would another way to find the expected move be to check the bollinger bands on the same time frame?

[@TradeBrigade]

Nope. Bollinger bands are a derivative of price and not options implied volatility! Make sure to use the calculations here instead of BB. BB really just is a lagging suggestion of where price could be contained. Expected move is a forward looking calculation based on options positions.

[@RicardoHernandez-zr1pw]

@@TradeBrigadeWhat other leading indicators do you recommend besides EM values for trading? VWAP?

[@GusPolinski13]

Is it accurate to say that there is a 68% chance prices will be contained in this channel **for the duration of whichever option chain being analyzed** ?

[@TradeBrigade]

Correct! And only at the time of analysis. The probability will change as the week goes on. (or whatever period you end up analyzing)

[@popcycles]

6:07 you say both are being bought at the ask. But that doesn't add up. 😂 I'm super confused.

[@TradeBrigade]

Same as prior comment on Mid vs Nat

[@darylzero3139]

Is there a way to calculate the 1 day expected move of a stock? ie NVDA?

[@TradeBrigade]

Just use the market maker expected move instead in ToS. The yellow cluster of three M's at the top of the trade tab

[@rickraymor3728]

Is there an easier method?

[@TradeBrigade]

How much easier can it get than this? Im not sure what type of method could be simpler than looking at a pre calculated number or even just taking the at the money straddle pricing.

[@RicardoHernandez-zr1pw]

I just need an automatic method please.

[@TradeBrigade]

It probably exists out there somewhere, but why not take the 2 minutes to do the math... its really a tiny amount of work for a massive edge.

[@ampiciline]

another way is : VIX/16 rule of 16 in VIX

[@TradeBrigade]

How does this work? Im not sure that I understand the equation as it relates to how one standard deviation is measured. Also on what time frame?

[@ScalpNinjaTrader]

Im crying looking at Qs chart from 1 yr ago 😂😭

[@TradeBrigade]

UP AND TO THE RIGHT.

[@ScalpNinjaTrader]

@@TradeBrigade 😂

[@ExtremeIntelligence8]

Is background noise(music) needed, hard to be different than others? maybe we need to work on self-esteem.

[@TradeBrigade]

Perhaps you should take the perspective that your comment is a mirror?

[@peterfrumenti8296]

I came here to say to say “stop projecting”. Trade Brigade beat me to it!

[@popcycles]

in your calculations, you're buying the bid of the put side of your straddle and strangle, yet in your video you say you're buying the ask of both. Doesn't add up.

[@TradeBrigade]

A classic brain moving too fast for my mouse and vice versa... the point stands.

[@popcycles]

​@@TradeBrigadeso is it buying the ask, or one leg is buying the bid?

[@TradeBrigade]

@@popcycles both technically buying the ask the platform automates the calculation to mid

[@popcycles]

@@TradeBrigade ahh thank you! I appreciate you responding. ❤️

[@Ball_Hard]

What do you mean by stock has liquid? Also do you have more learning videos like this on utube? I been teaching 2 yrs. Only do good on demos with thousands. But with small amount of real money i jist keep losing and i am just out here with no real trading strategy that works. I just wannna get over this hump and start making some real money man

[@TradeBrigade]

Liquidity refers to the amount of volume that transacts on an underlying ticker. In the options market if strikes have 2000+ contracts trading I would argue its decently liquid

[@isuxks720]

You aren’t making money with thousands if you don’t even know what liquidity is