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SCANA Stock Is Weak: Daunting Times for Investors

PART:
1 2 3 4
Part 3
SCANA Stock Is Weak: Daunting Times for Investors PART 3 OF 4

Analyzing SCANA’s Implied Volatility

Implied volatility

SCANA (SCG) has become one of the most volatile stocks among the S&P 500 Utilities in the last few months. On November 9, 2017, SCANA had an implied volatility of close to 32%—higher than its 15-day average implied volatility.

The implied volatility and stock prices are normally inversely related. A higher implied volatility suggests investors’ unease. It’s generally associated with falling stock prices.

Analyzing SCANA’s Implied Volatility

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NRG Energy (NRG), the most volatile stock among SPX Utilities, has an implied volatility of ~40%.

On November 9, the Utilities Select Sector ETF’s (XLU) implied volatility was near 10%, while the SPDR S&P 500 (SPY) (SPX-INDEX) had an implied volatility of 8%.

Broader utilities (IDU) are trading near their all-time high. To learn where utility stocks might go from their current levels, read US Utilities: Where the Stocks Might Go from Here.

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