Anadarko’s implied volatility
As we saw in the previous part, Anadarko Petroleum’s (APC) implied volatility is ~27%. In this part, we’ll try to forecast a price range for Anadarko stock in the next seven days, using Anadarko’s implied volatility.
Forecasting Anadarko’s stock price range
Using Anadarko Petroleum’s implied volatility, and assuming a normal distribution of stock prices and a standard deviation of 1, or a probability of 68.2%, Anadarko stock could close between $46.50 and $50.11 in the next week. For more about Anadarko’s recent stock performance, refer to Part 11 of this series.