Schlumberger’s implied volatility
On April 11, 2018, Schlumberger’s (SLB) implied volatility was 29.2%. Schlumberger’s 4Q17 earnings were announced on January 19, 2018. Since then, the company’s implied volatility has increased from 21% to the current level. The implied volatility reflects a stock’s potential price movement, as viewed by the option traders.
Stock price forecast
Considering Schlumberger’s implied volatility and assuming a normal distribution of stock prices and one standard deviation probability of 68.2%, Schlumberger stock will likely close between $70.28 and $64.82 in the next seven days. Schlumberger’s stock price was $67.55 on April 11, 2018.
Average implied volatility
Schlumberger’s current implied volatility is higher than its past two-year average of 21.4%. Schlumberger accounts for 3.4% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES provides exposure to the oil and gas equipment and services segment. XES has decreased 19% since April 12, 2017—compared to a 15% fall in Schlumberger’s stock price during this period.
Peers’ implied volatility
On April 11, 2018, Weatherford International’s (WFT) implied volatility was ~83%. Weatherford International’s stock price could range between $2.82 and $2.24 in the next seven days. Helmerich & Payne’s (HP) implied volatility was ~38% on the day. Helmerich & Payne’s stock price could range between $75.28 and $67.74 in the next seven days. Helix Energy Solutions’ (HLX) implied volatility was ~59% on April 11, 2018. Helix Energy Solution’s stock price could range between $6.91 and $5.85 in the next seven days.
On April 11, 2018, crude oil’s implied volatility was ~25%. Crude oil’s average implied volatility in the past two years was 29.7%. So, crude oil’s current implied volatility is lower than its past two-year average.
Next, we’ll discuss investors’ bearishness in Schlumberger stock.