Whether it’s an expiry day straddle or a monthly straddle, what does it indicate. As far as I know it indicates that there’s a 68% chance of the market closing within that range by expiry.
But another youtube video said that we should multiply the Straddle price by 85% and that is the expected move.
Another youtube video said that the Straddle price should be divided by 2, and that’s the expected move on any side.
So I this has me confused.
Of course I know that the market can move as much as it wants on any side at any time. But what does the Straddle price indicate in theory. Just wanted to clear the confusion.
@Sensibull