Basic Energy Services’ implied volatility
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 implied-volatility-suggested prices can be uncertain. CARBO Ceramics’ (CRR) implied volatility on May 8 was ~67%, while Helix Energy Solution’s (HLX) implied volatility was 50% on the day. Helmerich & Payne’s (HP) implied volatility was 26% on May 8. HP makes up 1.3% of the iShares Select Dividend ETF (DVY). The energy sector makes up 6.3% of the SPX-INDEX. The SPX-INDEX rose 6% year-to-date versus a 23% fall in BAS’s stock price.
7-day stock price forecast for BAS
Based on Basic Energy Services’ implied volatility and assuming normal distribution of stock prices and one standard deviation probability of 68.2%, BAS’s stock will likely close between $29.43 and $25.15 in the next seven days. BAS’s stock price was $27.29 on May 8, 2017.
Next, we’ll discuss whether investors have shown interest in BAS’s stock as indicated by its short interest.