Halliburton’s implied volatility
Halliburton’s (HAL) implied volatility was 25.2% on March 9, 2018. On January 22, 2018, the day Halliburton released its 4Q17 earnings, its implied volatility was 23%. Since then, Halliburton’s implied volatility has increased. Halliburton accounts for 3.7% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES decreased 21% in the past year—compared to an 8% 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 $48.63 and $45.35 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 $46.99 on March 9.
Implied volatility for Halliburton’s peers
On March 9, TechnipFMC’s (FTI) implied volatility was ~31%, which implies that the stock price could vary between $32.09 and $29.47 in the next seven days. McDermott International’s (MDR) implied volatility was 40.7% on March 9. McDermott International’s stock price could range between $8.18 and $7.30 for the next seven days. Weatherford International’s (WFT) implied volatility was ~61% on March 9. Weatherford International’s stock price could vary between $2.86 and $2.42 in the next seven days.
Crude oil’s implied volatility
On March 9, crude oil’s implied volatility was 21.1%. Since January 22, 2018, crude oil’s volatility has increased. Halliburton’s implied volatility also increased during the same period.
Next, we’ll discuss crude oil’s correlation with Halliburton.