FINNIFTY Expected Move — Live
Statistically probable range for FINNIFTY over the current expiry cycle.
What is expected move for FINNIFTY?
The expected move is the range within which FINNIFTY is expected to trade over a specific period, computed from live option prices. The standard method: expected move ≈ spot × ATM IV × √(DTE/365). This gives the 1σ range — FINNIFTY closes inside it ~68% of the time by construction. The 2σ range covers ~95%. The hero card shows current 1σ and 2σ upper/lower bounds for the nearest FINNIFTY expiry.
How to use the bands
Iron condor placement: sell spreads at strikes OUTSIDE the 1σ band and buy protection at 2σ. This gives ~68% base probability the short strikes expire OTM. Directional target setting: if you're bullish, the 1σ upper is a reasonable first target; 2σ is a stretch target. Stop placement: 1σ lower on a long trade is the statistical stop; going below usually means the setup is invalidated. News trades: if implied 1σ move is 200 but the news catalyst historically causes 300+ moves, options are UNDERPRICED — go long straddle. Opposite = short straddle.
Why 1σ isn't a guaranteed range
1σ = 68% probability under a LOG-NORMAL price distribution assumption. Real FINNIFTY returns have fatter tails than log-normal, so the ACTUAL breach rate is higher — usually 33-38% on daily data (vs the theoretical 32%). Don't treat the band as a hard wall; treat it as a statistical guideline. And expected move goes wider as DTE grows: on a 5-DTE weekly, 1σ might be ±250 points; on a monthly (DTE 25), it's ~±560. Match your timeframe.
Expected move vs gamma-flip vs max pain
Three related range indicators, each with different logic: Expected move = pure statistical range from IV. γ-flip = spot level where dealer hedging behaviour changes sign (dampens above, extends below). Max pain = level where the most option holders lose money. When all three converge on the same zone, that zone becomes the highest-conviction area for expiry-day settlement. Cross-check with the [FINNIFTY GEX](/gamma-exposure/finnifty) and [FINNIFTY Max Pain](/max-pain/finnifty) pages.
IV-crush after events
Expected move bands SHRINK dramatically after news events because IV collapses. A NIFTY 1σ of ±150 pre-RBI can crush to ±80 in the hour after — even if spot barely moved. This is why buying naked straddles right before events is often unprofitable — the IV crush eats gains even on a directionally-correct trade. Better: buy the straddle 3-5 days before, close before the event to capture the IV run-up.
Frequently Asked Questions
Is the expected move deterministic?
No — it's statistical. 1σ covers ~68% of expiry outcomes historically.
How is the 1σ move computed?
spot × ATM IV × √(DTE/365). We use the ATM straddle IV directly (not smile-adjusted) for cleanliness.
Should I trade the bands as support/resistance?
Not intraday. Bands are for expiry-cycle target setting and iron-condor strike placement — not scalping.
Why does the range widen further from expiry?
Because √DTE grows. A 30-DTE move range is ~2.5× a 5-DTE range.
What data source powers this?
Live NSE option chain via Kite Connect. Refreshed every 60 seconds.
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