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.
הערות שחרור
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11/20/22 Update Added ability to extend the expected move level lives to the right. Go to settings and check "Extend Lines Right".
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03/10/23 UPDATE
Changes:
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
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4/18/23 Added ability to change the Weekly Expected Move label color.
Does this work for SPY daily options? I inputted the next Monday EM and all off them are way above the current price at the moment. Not sure if that is due to the big move it made.
ShiseAVWAP
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@iAmPhilo, Ignore me, I learnt more about the expected move, will just do it manually for now. But great indicator still for people who only play one stock
FourC
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@iAmPhilo, hi yes the indicator only plots the weekly expected move for now (next friday exp). I do have plans in the future to be able to plot next day expiration, which will work for trading 0DTE options. I may implement that this weekend actually. But, that likely won't work for something in the middle of the week for next week, for example, like next Tuesday EM.
jehammo
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Thank you. Fantastic. Multiple sigma moves, ease of use. Much appreciated
I really do like this. Very easy as opposed to calculating it manually and adding the lines to charts. Currently the EM I enter will apply to every chart i go to. Would be nice if i could enter expected moves for each individual ticker and it would save. Other than that, this is great
FourC
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@Savage_Rey, hey i am glad you are finding it useful. Yes, that is the main issue for me as well. The one work around i have come up with is i have a 8 chart watchlist layout of my main tickers, and i input the EM on each one. I have definitely given some thought as to how to resolve this so that the indicator will know the different EM for different tickers... Not sure how to go about that with code (i am def not a pro coder). If you have any thoughts or recommendations for any other workarounds let me know. Also, i am working to possible adjust a bug or two that could be fixed. Thanks again for your feedback. Peace!
syntaxgeek
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@FourC, I'd recommend having a symbol input and then the EM paired directly to that, so [Symbol 1, Symbol 1 EM] +++. Then you have folks supply up to however many you want to support and then when people are adjusting to different symbols the indicator code will only plot the levels if the symbol matches one from the settings and use the associated EM.