The Skinny On Options Math - November 27, 2024 - Expectations and Deviations

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The discussion centers around the concepts of expected value, standard deviation, and expected moves in trading, highlighting the difference between intuitive expectations and mathematical definitions. The detailed explanation clarifies how expected moves, commonly used in financial platforms, are based on standard deviation rather than literal expectations. Emphasizing Jensen's inequality, the discussion explains how expected moves can sometimes overestimate actual outcomes. This nuanced understanding aids traders in aligning intuitive and probabilistic insights for better decision-making.