Devon Energy’s implied volatility
As of January 20, 2017, Devon Energy (DVN) had implied volatility of ~33.1%, which is ~42.4% below its 260-trading day historical price volatility of ~57.6%.
Stock price range forecast for the week
Assuming a normal distribution of prices and standard deviation of one, based on its implied volatility of ~33.1%, Devon Energy’s stock is expected to close between $48.38 and $44.14 after seven calendar days. Based on the standard statistical formula, Devon Energy’s stock will stay in this range ~68% of the time.
Implied volatility of DVN’s peers
As of January 20, 2017, upstream stocks Encana (ECA), Diamondback Energy (FANG), and ConocoPhillips (COP) had implied volatility of ~41.4%, ~31.8%, and ~25.0%. The SPDR S&P 500 ETF (SPY) has implied volatility of ~10.9%.
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, which means the data is theoretical in nature and there is no guarantee these forecasts will be correct.