What Does Southern Company’s Implied Volatility Suggest?
On September 28, 2017, Southern Company (SO) stock had an implied volatility of 13%—marginally higher than its 15-day average implied volatility.
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The Utilities Select Sector SPDR ETF’s (XLU) implied volatility was near 11.5%. It had a 15-day average implied volatility near 9.5%.
The largest independent power producer in the country, NRG Energy (NRG) is the most volatile stock in the S&P 500 Utilities Index. On September 28, 2017, its implied volatility was 40%.
It should be noted that higher implied volatility usually implies that investors are anxious. Stocks’ implied volatilities and prices are usually inversely related.