the option-mispricing edge · Options & probability — the math of “what are the odds?”
How much the stock has actually moved, measured from its price history.
How much the options market expects it to move, backed out of what options currently cost.
When implied is below realized, the options market is pricing in less movement than the stock typically delivers — the option may be cheap. That gap (the app calls it the “value edge”) is the heart of the LEAPS opportunity score: a cheap option on a stock that’s set to move is the mispricing worth hunting.
value edge = realized volatility − implied volatility positive edge = the option is priced cheap vs how the stock actually moves