Weatherford’s implied volatility
On November 24, 2017, Weatherford International’s (WFT) implied volatility (or IV) was 61%. It released its 3Q17 financial results on November 1, 2017. Since that date, its IV has increased from 54% to 61%. Since November 1, WFT stock has fallen 7%. WFT makes up 2.6% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES has risen 1% since November 1, 2017.
Weatherford’s 7-day stock price forecast
WFT stock will likely close between $3.77 and $3.19 in the next seven days. The estimate is based on its IV, assuming a normal distribution of stock prices and one standard deviation probability of 68.2%. WFT stock was trading at $3.48 on November 24, 2017.
Implied volatility for WFT’s peers on November 24
Implied volatility indicates a stock’s potential price movement as viewed by option traders. McDermott International’s (MDR) IV on November 24 was 36%, which implies that MDR stock could vary between $7.69 and $6.95 in the next seven days. TechnipFMC’s (FTI) IV was 32% on November 24, 2017. FTI stock could thus vary between $28.11 and $25.73 in the next seven days. Read more on FTI in Market Realist’s TechnipFMC: What Worked and What Did Not in 3Q17.
Crude oil’s implied volatility
On November 24, 2017, crude oil’s implied volatility was 22.5%. Since September 29, 2017, the IV for crude oil has decreased. Since September 29, 2017, WFT’s IV has increased from 52% to 61%. The S&P 500 Index (SPX-INDEX) has risen 3% since September 29, 2017. The energy sector accounts for 5.9% of the S&P 500 Index.
Next, we’ll take a look at Weatherford’s correlation with the price of crude oil.