To calculate the implied move for earnings, add the at-the-money call and put premiums on the expiration spanning the report, then divide by the current stock price. That percentage is the market's approximate expected move. It is a yardstick for research — not a prediction of what will happen.
Step 1: pick the right expiration
Use the option expiration that includes the earnings date — usually the nearest weekly or monthly expiry after the report. Options on other expirations mix earnings event premium with ordinary time value, which distorts the calculation.
Step 2: find the at-the-money straddle
Identify the strike closest to the current stock price. Add the call premium and put premium at that strike. That sum is the ATM straddle price — the cost of betting the stock moves in either direction by expiration.
Step 3: convert to a percentage
Numeric example (illustrative): suppose a stock trades at $200 and the ATM straddle on the earnings expiration costs $14 ($7 call + $7 put). The implied move is roughly $14 ÷ $200 = 7% — meaning options are pricing about a plus or minus 7% move around the report. Compare that to the stock's historical earnings moves to see if options look rich or cheap.
What the implied move does and does not tell you
- It does show the forward-looking range the options market is pricing.
- It does give a common yardstick to compare across stocks and quarters.
- It does not predict the actual move — some names beat it often, others rarely.
- It does not account for IV crush after the event; that is a separate effect.
For the full conceptual guide, see the implied move around earnings. For where it sits in the broader cycle, see earnings volatility.
Limitations of manual calculation
- Bid-ask spreads on illiquid strikes can make hand-calculated figures noisy.
- Strike selection matters when the stock sits between strikes.
- Timing — the implied move changes every minute as IV shifts; a snapshot from yesterday may not reflect today's market.
- Far from earnings the figure is not meaningful; it firms up only as the report nears.
This is why most traders use a platform rather than a spreadsheet. EarningsWatcher computes the live implied move from real option chains and shows it next to each stock's historical earnings-move distribution in the Moves analyser.
How EarningsWatcher helps
Instead of calculating by hand, open the Calendar or Moves analyser for any reporting ticker. You get the live implied move, the decade-average earnings move, beat-rate history and tail risk in one view. The weekly calendar lists every name reporting soon with current implied figures.
Frequently asked questions
How do you calculate the implied move from a straddle?
Take the at-the-money straddle price (call plus put at the strike nearest the stock price) on the expiration that spans the earnings date. Divide that combined premium by the current stock price. The result, expressed as a percentage, is the approximate implied move the market is pricing for the event. For example, a $5 straddle on a $100 stock implies roughly a plus or minus 5% expected move.
Why use the at-the-money straddle for the implied move?
The ATM straddle is the standard benchmark because it is the most liquid, delta-neutral expression of event premium on the earnings expiration. It captures how much traders are paying for non-directional exposure to the report without picking a direction.
Does the implied move equal the actual earnings move?
No. The implied move is a forward-looking estimate from option prices. The actual move is what happens after the report. Some stocks routinely beat their implied move; others undershoot. The historical record per ticker is the reference — not a guarantee either way.
Where can I see the live implied move for earnings?
EarningsWatcher shows the live implied move on the Calendar and in the Moves analyser for each reporting stock, alongside historical earnings-move distributions. The figure updates as the report approaches and options liquidity firms up.
This article is educational and does not constitute financial advice. Options involve risk and are not suitable for every investor.