What’s Marathon Oil’s Price Range Forecast for the Week?



Marathon Oil’s implied volatility

As of January 13, 2017, Marathon Oil (MRO) had an implied volatility of ~40.3%, which is ~39.0% below its 260-day historical price volatility of ~66.1%.

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Stock price range forecast for the week

Assuming normal distribution of prices (bell curve model) and standard deviation of one, based on its implied volatility of ~40.3%, Marathon Oil’s stock is expected to close between $18.42 and $16.48 after seven calendar days. Based on the standard statistical formula, Marathon Oil’s stock will stay in this range ~68% of the time.

Other upstream stocks

As of January 13, 2017, Encana (ECA), Diamondback Energy (FANG), and ConocoPhillips (COP) have implied volatilities of ~42.8%, ~33.7%, and ~26.7%, respectively. The SPDR S&P 500 ETF (SPY) has an implied volatility of ~11.4%.

Implied volatility shows the market’s opinion of the 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’s no guarantee these forecasts will be correct.


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