Halliburton’s implied volatility
On December 22, 2017, Halliburton’s (HAL) implied volatility was 24.1%. Since its 3Q17 financial results were announced on October 23, 2017, Halliburton’s implied volatility has risen from ~20% to the current level. Halliburton accounts for 3.5% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES fell 25% in the past year—compared to a 12% fall in Halliburton’s stock price during the same period. The implied volatility signals a stock’s potential price movement, as viewed by the option holders.
Halliburton’s seven-day stock price forecast
Halliburton stock will likely close between $49.62 and $46.40 in the next seven days—based on its implied volatility. Halliburton’s seven-day stock price forecast is based on a normal distribution of stock prices and one standard deviation probability of 68.2%. Halliburton’s stock price was $48.01 on December 22.
Implied volatility for Halliburton’s peers
On December 22, TechnipFMC’s (FTI) implied volatility was ~29.5%, which implies that its stock price could vary between $32.42 and $29.88 in the next seven days. McDermott International’s (MDR) implied volatility was ~34% on December 22. It implies that McDermott International’s stock price could range between $7.13 and $6.41 in the next seven days. CARBO Ceramics’ (CRR) implied volatility was ~60% on December 22. It implies that CARBO Ceramics’ stock price could vary between $11.02 and $9.32 in the next seven days.
Crude oil’s implied volatility
On December 22, crude oil’s implied volatility was 15.5%. Since October 23, crude oil’s volatility has fallen, while Halliburton’s implied volatility has risen. Since October 23, 2017, the S&P 500 Index (SPX-INDEX) has risen 5%. The energy sector makes up 5.8% of SPX-INDEX.
Next, we’ll discuss crude oil’s correlation with Halliburton.