What Does Schlumberger’s Implied Volatility Imply?



Schlumberger’s implied volatility

On January 3, 2016, Schlumberger (SLB) had an implied volatility of ~22.0%. Since SLB’s 3Q16 financial results were announced on October 20, 2016, its implied volatility has fallen from ~23.0% to its current level of ~22.0%.

SLB makes up 0.41% of the iShares MSCI ACWI Low Carbon Target (CRBN). The energy sector makes up 6.0% of CRBN.

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What does implied volatility mean?

Implied volatility (or IV) reflects investors’ views of a stock’s potential movement. However, IV doesn’t forecast direction. It’s derived from an option pricing model.

It’s worth noting that the correctness of IV-suggested prices can be uncertain. Flotek Industries’ (FTK) implied volatility on January 3, 2017, was ~79.0%, and Baker Hughes’s (BHI) implied volatility was ~31.0%. Helmerich & Payne’s (HP) implied volatility that day was ~33.0%.

Next, we’ll take a look at investors’ short interest in Schlumberger stock.


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