Anadarko’s implied volatility
Anadarko Petroleum’s (APC) implied volatility is 28.5%, which is ~5% lower than its 15-day average of ~30%. In comparison, APC’s peers Concho Resources (CXO) and Apache (APA) have implied volatilities of ~25% and ~32%, respectively.
Implied volatility is an options model–based estimate. It provides information on how a stock could move in the market in a given period. In a bullish market, implied volatility is most likely to fall. In a bullish market, the opposite could be true.
Forecasting the price range for Anadarko stock
Based on Anadarko Petroleum’s implied volatility of ~28.5% and assuming a normal distribution of stock prices and a standard deviation of one (or a probability of 68%), we can estimate that Anadarko stock could close between $41.58 and $55.30 in the next three months.