What Does BP’s Implied Volatility Tell Us?



BP’s implied volatility

BP’s (BP) implied volatility currently stands at 24.6. This is 11% lower than the 30-day average implied volatility of 27.7. Since June 6, 2016, BP’s implied volatility has risen 3%. When Market sentiment toward a stock is bullish, its implied volatility falls, and vice versa. During this period, contrary to Market sentiment, BP stock rose 11%.

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Peers’ implied volatility

BP’s peer Exxon Mobil (XOM) has the lowest implied volatility at 15.9. On the other hand, Petrobras (PBR) has the highest implied volatility at 60.2. Suncor (SU) and Eni SpA (E) have higher implied volatilities than BP. Total (TOT), Shell (RDS.A), and Chevron (CVX) have lower volatilities.

If you’re looking for exposure to energy sector stocks, you can consider the Energy Select Sector SPDR ETF (XLE).


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