How Volatile Is Core Laboratories Now?



Core Laboratories’ implied volatility

On August 8, 2016, Core Laboratories (CLB) had an implied volatility of ~44.5%. After its 2Q16 earnings were announced on July 20, 2016, the company’s implied volatility increased from ~35.6% to its current level. Notably, CLB makes up only 0.02% of the iShares Dow Jones US ETF (IYY), but the energy sector makes up 6.5% of the fund.

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What does implied volatility mean?

Remember, IV (implied volatility) reflects investors’ views of a stock’s potential movement. But IV does not forecast direction. IV is derived from an option pricing model, and investors should note that the correctness of an implied volatility suggested price can be uncertain. Schlumberger’s (SLB) volatility on August 8, for example, was 20.7%.

In the next and final part, we’ll discuss Core Laboratories’ returns in the context of industry indicators.


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