15 Dec

Can US Crude Oil Break Below $57 Next Week?

WRITTEN BY Rabindra Samanta

Implied volatility

On December 14, 2017, the implied volatility of US crude oil futures was 18.1%. It was 14.8% below its 15-day average. That day, implied volatility was the least since September 30, 2014.

Can US Crude Oil Break Below $57 Next Week?

On February 11, 2016, bearish sentiments pushed US crude oil (USL) (DBO) (OIIL) futures to their 12-year low, while implied volatility hit 75.2%. Since the multiyear low, the rise in oil prices was more than 100%. Implied volatility fell 75.9% over this period. The above chart demonstrates this converse relationship.

Oil prices

There’s a 68% chance that between December 15 and December 21, 2017, the closing price of US crude oil futures will fall between $55.61 and $58.47 per barrel. This model assumes that prices are normally distributed. The implied volatility for this calculation was 18.1%.

On December 14, 2017, US crude oil January 2018 futures closed at $57.04 per barrel. If oil prices break below the $57 level next week, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) could be influenced by the downturn. These equity indexes’ energy sector allocations that we looked at in Part 2 could be sensitive to oil prices. Energy ETFs that we looked at in Part 3 and others such as the Fidelity MSCI Energy ETF (FENY) stand to lose with a fall in oil.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.