Schlumberger’s implied volatility
On October 20, 2017, Schlumberger’s (SLB) implied volatility was 20.0%. Schlumberger released its 3Q17 financial results on the same day. Since its 2Q17 financial results were announced on July 21, Schlumberger’s implied volatility has increased from 19.0% to this level.
During the same period, SLB’s stock price fell 5.0%. SLB comprises 3.0% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES has fallen 4.0% since July 21, 2017.
Schlumberger’s seven-day stock price forecast
Based on its implied volatility, Schlumberger stock could close between $61.41 and $64.89 in the next seven days. Schlumberger’s seven-day stock price forecast considers a normal distribution of stock prices, a standard deviation of 1, and a probability of 68.2%. SLB’s stock price was $63.15 on October 20, 2017.
Implied volatility for SLB’s peers
National Oilwell Varco’s (NOV) implied volatility on October 20 was ~28.0%, which implies that NOV’s stock price can vary between $32.75 and $35.43 in the next seven days.
Helmerich & Payne’s (HP) implied volatility was ~31.0% on October 20. This implies that HP’s stock price can range between $49.75 and $54.25 in the next seven days.
Tidewater’s (TDW) implied volatility was ~55.0% on October 20. This implies that TDW’s stock price can vary between $24.99 and $29.15 in the next seven days.
You can read about the free cash flow comparison of the oilfield services companies in Market Realist’s Oilfield Services Stocks: Free Cash Flow Winners and Losers.
Crude oil’s implied volatility
On October 20, crude oil’s implied volatility was 24.0%. Since July 21, crude oil’s volatility has decreased, and SLB’s implied volatility has increased.
Since July 21, 2017, the S&P 500 Index (SPX-INDEX) has increased 4.0%. The energy sector makes up 6.0% of SPX-INDEX.
In the final part of this series, we’ll discuss SLB’s correlation coefficient with crude oil.