What Southern Company’s Implied Volatility Tells Us
Southern Company’s implied volatility
On April 7, 2017, Southern Company’s (SO) implied volatility was 12.8%—marginally below its 15-day average. As the graph below shows, a fall in SO’s implied volatility has generally been associated with gains in its stock price, while a rise in implied volatility has been generally associated with stock price declines.
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By comparison, the Utilities Select Sector SPDR (XLU) had an implied volatility of ~13% on April 7, 2017, while peer Dominion Resources’ (D) implied volatility was 14.6%—close to its 15-day average.
Continue to the next and final part of this series for a discussion of the current analyst recommendations for Southern Company.