Stock Price Movement Calculator

Stock price movements can be probabilistically calculated, BUT the direction cannot.

Price – enter price of Underlying Stock

IV – enter Implied Volatility of Options – generally At the Money will be most valid. Look for IV of the narrowest spread (difference between bid-ask) options.

Time – Enter the number of calendar days until expiration

Variance: + or – the variance amount is a 1 standard deviation move, representing a statistical likelihood of 68% that the stock will land inside the range. That means a 34% likelihood for either direction, of course. Directionality is not accounted for in this model. A 2 SD move simply doubles the amount and so forth. The likelihood of being within 2 SDs is 95% OR a 5% chance of exceeding 2 Standard Deviations. 3 SD’s gives 99.7% chance of not exceeding it. At these extremes, the outcomes are wrong, however. (I am planning a post to address this distortion and a method to profit from it. If that is not linked here, then contact me and I will make it happen. It’s pretty cool, but would take some serious analysis and an automated trading system.)