How Volatile Is FMC Technologies?



FMC Technologies’ implied volatility

On October 5, 2016, FMC Technologies (FTI) had an implied volatility of ~31%. That compares to ~28% when it announced its 2Q16 financial results on July 20, 2016.

FTI is 0.08% of the iShares MSCI ACWI Low Carbon Target (CRBN). The energy sector makes up 6% of CRBN.

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What does implied volatility mean?

Implied volatility reflects investors’ views of a stock’s potential movement. However, it doesn’t forecast direction. Implied volatility is derived from an option pricing model. You should note that the correctness of an implied volatility can be uncertain. Oceaneering International’s (OII) implied volatility on October 5, 2016, was 38%.

Energy stocks are typically correlated with the price of crude oil. Has FTI’s correlation with the price of crude oil increased? Let’s find out in the next part of the series.


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