Weatherford’s implied volatility
On July 21, 2017, Weatherford International’s (WFT) implied volatility was 70.2%. On April 28, 2017, Weatherford’s 1Q17 financial results were announced. Since then, Weatherford’s implied volatility has increased from ~55% to ~70%. Weatherford accounts for 3.2% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES has fallen 14% in the past year—compared to an 18% fall in Weatherford’s stock price.
Weatherford’s seven-day stock price forecast
Weatherford stock will likely close between $4.81 and $3.95 in the next seven days—based on its implied volatility and assuming a normal distribution of stock prices and one standard deviation probability of 68.2%. Weatherford’s stock price was $4.38 on July 21, 2017.
Implied volatility for Weatherford’s peers
Crude oil’s implied volatility
On July 21, crude oil’s implied volatility was ~28%. Since early May 2017, Weatherford’s implied volatility has risen sharply from ~53% to ~71%, even though crude oil’s volatility during the same period has actually decreased. The SPX-INDEX rose 14% in the past year—compared to a 25% fall in Weatherford’s stock price. The energy sector makes up 6.0% of SPX-INDEX.
Next, we’ll discuss investors’ short interest in Weatherford.