X
<

How Implied Volatility, Short Interest Are Affecting Utilities

PART:
1 2 3
How Implied Volatility, Short Interest Are Affecting Utilities PART 1 OF 3

Utility Stocks with the Highest Implied Volatilities

Utility stocks with high implied volatilities

On March 15, 2017, NRG Energy (NRG) had the highest implied volatility among the companies that make up the Utilities Select Sector SPDR ETF (XLU). NRG’s implied volatility was 39.2% on March 15, 1.9% below its 15-day average.

Utility Stocks with the Highest Implied Volatilities

Interested in AES? Don't miss the next report.

Receive e-mail alerts for new research on AES

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Now let’s take a look at the implied volatilities of other utility stocks as of March 15, 2017:

  • AES (AES): 28.5%, or 5.1% above its 15-day average
  • Scana (SCG): 20.3%, or 11.4% above its 15-day average
  • FirstEnergy (FE): 18.6%, or 3.1% below its 15-day average
  • CenterPoint Energy (CNP): 18.4%, or 7.1% above its 15-day average

SCG’s implied volatility rose the most compared to its 15-day average among the five utility stocks with high implied volatilities. On March 15, 2017, SCG stock rose 1.9%, and its implied volatility rose 9.6%.

The recent surge in natural gas demand due to cooler weather could be driving the stock’s gains. However, the uncertainty surrounding nuclear power reactors being built by Toshiba for SCG, coupled with the stock’s going ex-dividend last week, could also be contributing to its volatility.

Utility stocks with low implied volatilities

On March 15, 2017, Southern Company (SO) had the lowest implied volatility of all the utility companies that make up XLU. Its implied volatility was 12.7%, which was 7.1% below its 15-day average.

Let’s look at the other utility stocks with low implied volatilities as of March 15, 2017:

  • Dominion Resources (D): 12.9%, or 11.8% below its 15-day average
  • Duke Energy (DUK): 12.9%, or 7.7% below its 15-day average
  • PPL Corporation (PPL): 13.1%, or 5.6% below its 15-day average
  • American Electric Power Company (AEP): 13.6%, or 7.5% below its 15-day average

Large movements or expectations of large movements in stocks’ prices can cause their implied volatilities to rise. In the next article, we’ll take a look at the returns of the above-mentioned stocks.

X

Please select a profession that best describes you: