Turn implied volatility into a probable price range — and see where to place your strikes when you sell premium.
About a 68% chance the stock closes between $88.53 and $111.47 by expiration — and a 95% chance it stays between $77.06 and $122.94.
Selling premium is a probability game. Strikes outside the expected move have the odds at their back — the further out, the higher the theoretical chance of expiring worthless, and the less premium you collect.
Probabilities are theoretical, measured at expiration, and assume a normal distribution around today's price. They ignore the premium you collect (which widens your real breakeven), early assignment, and the fact that the chance of price touching a strike before expiry is roughly double the chance of closing beyond it.
This calculator turns IV into a probability cone. The judgment call — which underlying, which expiry, how much size — is where experience pays. Top GIOAT options sellers post their cash-secured puts in real time, with verified track records you can audit before you follow.
The formula. Expected move (1σ) = price × IV × √(days ÷ 365). Implied volatility is quoted as an annualized number, so the square-root-of-time factor scales it down to your expiration. A $100 stock at 40% IV over 30 days has a 1σ move of about $11.46.
What “1σ” means. One standard deviation. Assuming a normal distribution around today's price, the stock closes within ±1σ about 68% of the time and within ±2σ about 95% of the time. The shaded region on the curve is that inner 68%.
The 85% straddle rule. If you'd rather read the move straight off the option chain, the at-the-money straddle (call + put at the current strike) is a fast proxy: expected move ≈ 0.85 × straddle. Flip the toggle to By straddle to price the move that way — we'll back-solve the implied volatility for you — or leave it in the optional field to cross-check an IV input.
What it can't see. Real markets aren't perfectly normal — they have fat tails and a downside skew (crashes are faster than melt-ups). IV itself drifts over the life of the trade. And these are close probabilities: the odds of price touching a level intraday are roughly double. Treat the cone as a planning tool, not a guarantee.