Encana’s implied volatility
On February 3, 2017, Encana (ECA) had an implied volatility of ~43.7%, which is ~35.5% below its 260–trading day historical price volatility of ~67.8%.
Stock price range forecast for the week
Assuming normal distribution of prices, using the bell curve model and a standard deviation of 1 based on its implied volatility of ~43.7%, Encana stock is expected to close between $13.30–$11.78 after seven calendar days. Based on the standard statistical formula, Encana stock could stay in this range ~68% of the time.
Other upstream stocks
On February 6, 2017, upstream stocks California Resources (CRC), Occidental Petroleum (OXY), and ConocoPhillips (COP) had implied volatilities of ~74.4%, ~19.9%, and ~26.2%, respectively. The SPDR S&P 500 ETF (SPY) (SPX-INDEX) had implied volatility of ~10.6%.
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. This means the data is theoretical in nature, and there is no guarantee these forecasts will be correct.