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These Utilities Made the Most of 1Q17—Did You?

PART:
1 2 3 4 5 6 7
Part 6
These Utilities Made the Most of 1Q17—Did You? PART 6 OF 7

Utilities to Handle with Care: XLU Implied Volatility

XLU’s implied volatility

On March 31, 2017, the implied volatility of the Utilities Select Sector SPDR (XLU) was 12.6%, which was marginally higher than its 15-day average implied volatility.

Utilities to Handle with Care: XLU Implied Volatility

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As the graph shows, a fall in XLU’s implied volatility has been generally associated with gains in stock prices, while falls in stock prices have been associated with rises in implied volatility.

Notably, among the S&P 500 utilities, the largest merchant power stock, NRG Energy (NRG), had the highest implied volatility (36%) on March 31, 2017.

To learn more about NRG Energy, read Market Realist’s series Why NRG Energy Stock Could Continue to Soar.

Continue to the next and final part of this series for an examination of the major US utilities’ price targets—and what these targets could mean for investors over the next 12 months.

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