Expected Move
An estimate of how far price is likely to travel over a horizon, from either volatility or option pricing — a range, not a forecast.
Also called: expected range · ATR band · expected move options
What it means
Expected move puts a number on the plausible distance of a move, which turns a vague directional read into something testable against a target. It can be derived from realised volatility, typically ATR scaled by the square root of the horizon, or from option prices via implied volatility.
It says nothing about direction, and it is a distribution rather than a boundary: price exceeds the band regularly, and a band that was never exceeded would be far too wide to be useful.
Its main practical use is as a sanity check. A target beyond the expected move for the holding period is asking for an unusual move, which is worth knowing before entry rather than after.
How OptionLab Pro’s engine uses it
In the live engine
We compute the band as ATR x sqrt(N) and render it as price lines on the chart plus a strip on the signal panel, from the same ATR value the position-sizing suggestion uses — one source, so the band and the size cannot contradict each other.
go/internal/engine/expected_move.go (ATR x sqrt(N) band)The common mistake
Where traders get this wrong
Reading the band as a hard boundary and sizing as though price cannot leave it. It is a central estimate from a distribution with real tails, and the tails are where accounts are lost.
Related terms
Educational and analytical content only. OptionLab Pro is not a SEBI-registered investment adviser or research analyst and does not give buy or sell recommendations. Derivatives trading carries a high risk of loss.