Marathon Oil Stock Range Forecast, Week Ended March 24
Marathon Oil’s implied volatility
As of March 17, 2017, Marathon Oil (MRO) had an implied volatility of ~39.11%, which is ~26.25% below its 260-trading day historical price volatility of ~53.03%. MRO’s implied volatility has fallen by one-third of a percentage point in the past week.
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Stock price range forecast for the week
Assuming a normal distribution of prices (bell curve model) and a standard deviation of one, based on its implied volatility of ~39.11%, Marathon Oil’s stock is expected to close between $16.30 and $14.62, after seven calendar days. Based on the standard statistical formula, Marathon Oil’s stock will stay in this range ~68% of the time.
Other upstream stocks
As of March 17, 2017, upstream peers California Resources (CRC), Occidental Petroleum (OXY), and Southwestern Energy (SWN) have implied volatilities of ~77.5%, ~20.8%, and ~54.3%, respectively. The SPDR S&P 500 ETF (SPY) has an implied volatility of ~10.8%.
Investors should note, however, that implied volatility only shows the market’s opinion of the stock’s potential moves—it can’t forecast direction. Implied volatility is derived from an option pricing model, which means that the data is theoretical in nature and that there is no guarantee that these estimations will be correct.