Which OFS Stocks Have the Highest Implied Volatility?



OFS stocks with the highest implied volatilities

On March 14, 2017, Seadrill (SDRL) had the highest implied volatility among OFS (oilfield equipment and services) companies that are part of the VanEck Vectors Oil Services ETF (OIH). Its implied volatility was 138.8%, which is ~0.1% below its 15-day average.

Below are the volatilities of other OFS stocks as of March 14, 2017:

  • Weatherford International (WFT) – 64.5%, or 23.9% above its 15-day average
  • Carbo Ceramics (CRR) – 62.5%, or 0.70% below its 15-day average
  • Noble (NE) – 57.9%, or 6.9% above its 15-day average
  • ENSCO (ESV) – 55.4%, or 3.4% above its 15-day average

The rise in Weatherford International’s implied volatility, compared to its 15-day average, is the largest among the five OFS stocks with the highest implied volatilities. Weatherford International stock fell 5.4% on March 14, 2017, while its implied volatility rose 25%. On March 9, 2017, Citigroup increased its target price on the stock by $0.5 to $7.6. On March 6, the company announced the appointment of an ex-Halliburton executive as its CEO. The stock rose 12.6% on March 7.

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OFS stocks with low implied volatilities

Now, let’s look at OFS stocks with low implied volatilities on March 14, 2017:

  • Schlumberger (SLB) – 17%, or 0.3% above its 15-day average
  • Baker Hughes (BHI) – 22.6%, 1.3% above its 15-day average
  • Halliburton (HAL) – 24.9%, or 4.9% above its 15-day average
  • Tenaris (TS) – 28.2%, or 1.7% above its 15-day average
  • TechnipFMC (FTI) – 28.5%, or 3.3% below its 15-day average

Stocks of companies with stronger financial situations generally have lower implied volatilities. However, large movements in stocks can also cause implied volatilities to rise.

In the next part of this series, we’ll look at the returns of these stocks.


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