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ConocoPhillips’s Implied Volatility: Stock Price Forecast

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ConocoPhillips’s implied volatility

As of August 1, 2016, ConocoPhillips (COP) had an implied volatility of ~33.3%, which is ~26.8% below its 260-trading day historical price volatility of ~45.5%. After earnings were announced on July 28, 2016, ConocoPhillips’s implied volatility increased from ~32.6% to ~33.3% in three sessions.

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ConocoPhillips’s 30-day stock price forecast

Assuming a normal distribution of prices and a standard deviation of one, based on its implied volatility of ~33.3%, ConocoPhillips’s stock is expected to close between $43.39 and $35.83 after 30 calendar days. Based on the standard statistical formula, ConocoPhillips’s stock will stay in this range ~68% of the time.

Other upstream stocks

As of August 1, 2016, upstream stocks Parsley Energy (PE), Gulfport Energy (GPOR), and Energen (EGN) had implied volatility of ~38.1%, ~44.6%, and ~49.6%, respectively. The SPDR S&P 500 ETF (SPY) has implied volatility of ~10.3%.

Implied volatility shows the market’s opinion of a stock’s potential moves, but it doesn’t forecast direction. Implied volatility is derived from the option pricing model. This means the data is theoretical in nature and there is no guarantee these forecasts will be correct.

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