By the time most traders turn on their screens, the expected move edges are already set. Here is what that means and how to use it.
| | | Apple was at the upper edge of its expected move before most traders finished their coffee this morning. | Google was at the lower edge. Microsoft was at the lower edge. These are not predictions. These are the options market telling you exactly where the edges are before the cash open, before any tweet, before any headline. | Most traders do not know this is happening. They watch the news, they check their positions, they try to figure out which direction the market is going. By the time they decide, the setup is already playing out without them. | Here is what the expected move actually is. | The expected move is the at-the-money straddle price. Buy a call and a put at the current price and add them together. | That number is what the options market, with hundreds of billions of dollars behind it, says the stock is likely to move over the next session or week. | Not might move. Not could move. What the most informed pricing mechanism on earth says is the probable range. | Apple had an $8.50 expected move for tomorrow. | Tesla has been gravitating toward its weekly expected move edges all week. This is not astrology. This is probability backed by institutional money. | What changes when you know the edges. | Instead of asking where the market is going, you ask one question: where are the edges? | When price gaps to an edge overnight, you know before the bell rings where the setup is. The tweet does not matter. The headline does not matter. The edge is already set before any of that hits your screen. | This afternoon I placed a Broadcom butterfly on camera. Filled at 67 cents. Structured entirely around the expected move edge. No directional prediction. No chart pattern. No MACD. Just the edge and the structure. | That is Superfly. | Zero DTE options, meaning options that expire the same day, traded around expected move edges. Three to six alerts a week. Every trade tracked. | Watch the replay to see the Broadcom trade placed live, the expected move framework explained from scratch, and exactly how to apply it in a market like this one. | Watch it here. | To your success, | Don Kaufman | P.S. Monday, Wednesday, and Friday expirations just started listing for Apple, Google, Microsoft, Amazon, Tesla, Meta, Nvidia, and Broadcom on February 2nd of this year. The door just cracked open. The replay shows you how to walk through it. | | |
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