Weatherford’s implied volatility
On September 1, 2017, Weatherford International’s (WFT) implied volatility was 53.6%. Since July 28, 2017, when Weatherford’s 2Q17 financial results were announced, its implied volatility has fallen from 62% to the current level. Weatherford accounts for 3.4% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES fell 22% in the past year—compared to a 35% fall in Weatherford’s stock price during the same period.
Weatherford’s seven-day stock price forecast
Weatherford stock will likely close between $4.31 and $3.71 in the next seven days. The estimate is based on Weatherford International’s implied volatility—assuming a normal distribution of stock prices and one standard deviation probability of 68.2%. Weatherford’s stock price was $4.01 on September 1, 2017.
Implied volatility for Weatherford’s peers
Crude oil’s implied volatility
On September 1, 2017, crude oil’s implied volatility was 26.5%. Since June 30, 2017, Weatherford’s implied volatility has fallen sharply from ~81% to ~54%. During the same period, crude oil’s implied volatility has fallen marginally. The S&P 500 Index (SPX-INDEX) rose 14% in the past year. The energy sector accounts for 6.0% of SPX-INDEX.
Next, we’ll discuss Weatherford’s correlation with crude oil prices.