Southern Company and implied volatility
Southern Company (SO) stock recently witnessed higher implied volatility than the broader utilities (XLU) and the broader markets (SPY). On August 25, 2017, Southern Company’s implied volatility was near 12%, and its 15-day average implied volatility was around the same level.
The Utilities Select Sector SPDR ETF’s (XLU) implied volatility was 10% on August 25, 2017, similar to the broader markets.
NRG Energy (NRG) is the smallest component of the S&P 500 Utilities Index and the most volatile stock among its peers. Its implied volatility on August 25 was 40%.
Utility stocks had increased implied volatility when the Federal Reserve started raising interest rates in 2015. However, after delivering four quarter-point increases in the last two years, utilities’ implied volatility levels seem to be back at normal, hovering around 10%.
You can read more about utilities’ volatility in Understanding XLU Utilities’ Declining Implied Volatilities.