Baker Hughes’s implied volatility
Since BHI’s 4Q16 financial results were announced on January 26, 2017, its implied volatility has increased from 23.0% to 24.5% on April 10, 2017. On November 1, 2016, BHI’s implied volatility saw a sudden spike following its partnership deal with GE’s (GE) Oil & Gas business.
You can read more about the BHI–GE deal in Market Realist’s Can the BHI–GE Partnership Benefit from Global Growth?
BHI comprises 3.4% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). The oil and gas equipment and services industry makes up 66.5% of XES.
Baker Hughes also comprises 0.13% of the SPDR S&P 500 ETF (SPY). The energy sector makes up 6.6% of SPX-INDEX, which has increased 15% in the past year versus the 48% rise in BHI’s stock price.
BHI’s seven-day stock price forecast
Based on Baker Hughes’s implied volatility, as well as assuming normal distribution of stock prices and 1 standard deviation probability of 68.2%, BHI stock could close between $59.61–$63.81 in the next seven days. BHI’s stock price was $61.71 on April 10, 2017.
Implied volatility for BHI’s peers
What does implied volatility mean?
Implied volatility (or IV) reflects investors’ views of a stock’s potential movement. However, IV doesn’t forecast direction. Implied volatility is derived from an option pricing model. Investors should note that the correctness of suggested prices based on implied volatility can be uncertain.
Next, we’ll discuss investors’ short interest in Baker Hughes stock.