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Worst Oilfield Service Stocks: Analyzing Implied Volatility

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Dec. 29 2016, Updated 3:37 p.m. ET

Worst oilfield service companies’ implied volatility

In the previous part of this series, we discussed implied volatility for the top oilfield equipment and service companies, like Baker Hughes (BHI) and Halliburton (HAL). In this article, we’ll compare implied volatility for the worst oilfield service (or OFS) companies by expected earnings growth for 3Q16.

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Implied volatility of OIS and FTI

On December 23, Oil States International’s (OIS) implied volatility was ~38%. Since 3Q16 earnings were announced on October 28, OIS’s implied volatility has remained nearly unchanged.

On December 23, FMC Technologies’ (FTI) implied volatility was ~27%. Since 3Q16 earnings were announced on October 19, FTI’s implied volatility has fallen from~33% to the current level. Read the latest on FTI’s pending merger with Technip in Market Realist’s Is FMC Technologies’ Merger with Technip Almost Complete?.

Energy stocks typically correlate with crude oil prices. Has top oilfield service stocks’ correlation with crude oil increased? Let’s find this out in the next part of this series.

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