Stock price forecasts for the next week
Chesapeake Energy’s implied volatility of ~51% can be used to deduce its stock price range for the next week. If we assume a normal price distribution and a standard deviation of one, we can expect CHK’s stock to close between $4.53 and $5.20 in the next seven days. These statistical assumptions imply that CHK will stay in the above-mentioned range 68% of the time.
Implied volatility is a measure of the volatility of a stock’s price in the market. In a bearish environment, implied volatility usually rises. The opposite is true in a bullish market.