OPEN-SOURCE SCRIPT
4C Expected Move (Weekly Options)
Updated
This indicator plots the Expected Move (EM) calculated from weekly options pricing, for a quick visual reference.
The EM is the amount that a stock is predicted to increase or decrease from its current price, based on the current level of implied volatility.
This range can be viewed as support and resistance, or once price gets outside of the range, institutional hedging actions can accelerate the move in that direction.
The EM range is based on the Weekly close of the prior week.
It can be useful to know what the weekly EM range is for a stock to understand the probabilities of the overall distance, direction and volatility for the week.
To use this indicator you must have access to a broker with options data (not available on Tradingview).
Look at the stock's option chain and find the weekly expected move. You will have to do your own research to find where this information is displayed depending on your broker.
See screenshot example on the chart. This is the Thinkorswim platform's option chain, and the Implied Volatility % and the calculated EM is circled in red. Use the +- number in parentheses, NOT the % value.
Input that number into the indicator on a weekly basis, ideally on the weekend sometime after the cash market close on Friday, and before the Market open at the beginning of the trading week.
The indicator must be manually updated each week.
It will automatically start over at the beginning of the week.
The EM is the amount that a stock is predicted to increase or decrease from its current price, based on the current level of implied volatility.
This range can be viewed as support and resistance, or once price gets outside of the range, institutional hedging actions can accelerate the move in that direction.
The EM range is based on the Weekly close of the prior week.
It can be useful to know what the weekly EM range is for a stock to understand the probabilities of the overall distance, direction and volatility for the week.
To use this indicator you must have access to a broker with options data (not available on Tradingview).
Look at the stock's option chain and find the weekly expected move. You will have to do your own research to find where this information is displayed depending on your broker.
See screenshot example on the chart. This is the Thinkorswim platform's option chain, and the Implied Volatility % and the calculated EM is circled in red. Use the +- number in parentheses, NOT the % value.
Input that number into the indicator on a weekly basis, ideally on the weekend sometime after the cash market close on Friday, and before the Market open at the beginning of the trading week.
The indicator must be manually updated each week.
It will automatically start over at the beginning of the week.
Release Notes
11/20/22 UpdateAdded ability to extend the expected move level lives to the right.
Go to settings and check "Extend Lines Right".
Release Notes
03/10/23 UPDATEChanges:
- Added ability to plot the 2 Standard Deviation expected move
- Added ability to move expected move labels right or left for user preference
- Fixed settings for line color adjustments
- Revised and reorganized some code
Release Notes
4/18/23 Added ability to change the Weekly Expected Move label color.Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.