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Oilfield Volatility? OFS Implied Volatility and Short Interest

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Oilfield Volatility? OFS Implied Volatility and Short Interest PART 1 OF 3

These OFS Stocks Have the Highest Implied Volatility Right Now

OFS stocks with the highest implied volatilities

On March 21, 2017, Tidewater’s (TDW) had the highest implied volatility among OFS (oilfield equipment and services) constituents of the VanEck Vectors Oil Services ETF (OIH). TDW’s implied volatility was 164.5%, which is ~2.3% above its 15-day average.

These OFS Stocks Have the Highest Implied Volatility Right Now

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Below are the volatilities of other OFS stocks as of March 21, 2017:

  • Seadrill (SDRL): 161.8%, or 10.6% above its 15-day average
  • Noble (NE): 59.8%, or 7.5% above its 15-day average
  • ENSCO (ESV): 55.1%, on par with its 15-day average
  • Weatherford International (WFT): 52.2%, or 1.5% below its 15-day average

The rise in Seadrill’s implied volatility as compared to its 15-day average is the highest among the five OFS stocks with the highest implied volatilities. Seadrill stock fell 2.8% on March 21, 2017, while its implied volatility rose 10.5%. In the previous week, SDRL announced an arbitration settlement amounting to $170 million with Hyundai Samho Heavy Industries. In the past five days, it has risen 7%.

OFS stocks with low implied volatilities

Below are the OFS stocks with the lowest implied volatilities as of March 21, 2017:

  • Schlumberger (SLB): 18.5%, or 8.2% above its 15-day average
  • Baker Hughes (BHI): 21%, 3% below its 15-day average
  • Halliburton (HAL): 24.5%, or 3.7% above its 15-day average
  • TechnipFMC (FTI): 27.8%, or 1% below its 15-day average
  • Helmerich & Payne (HP): 29.3%, or 0.9% above its 15-day average

The stocks of companies with stronger financial situations generally have lower implied volatilities. However, large movements in stocks can also cause implied volatilities to rise.

In the next part of this series, we’ll look at the returns of these stocks.

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