Halliburton’s implied volatility
Halliburton’s (HAL) implied volatility was 32.5% on April 6, 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. HAL makes up 3.5% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES provides exposure to the oil and gas equipment and services segment of the energy sector. XES has decreased 22% since January 22, 2018, compared to a 17% fall for HAL stock for the same period. Implied volatility signals a stock’s potential price movement as viewed by the option holders.
Halliburton’s 7-day stock price forecast
Halliburton stock will likely close between $49.12 and $44.88 in the next seven days based on its implied volatility. Halliburton’s 7-day stock price forecast is based on a normal distribution of stock prices and one standard deviation probability of 68.2%. HAL stock was trading at $47 on April 6.
Implied volatility for HAL’s peers
TechnipFMC’s (FTI) implied volatility on April 6 was 39.1%, which implies that FTI stock could vary between $30.41 and $27.29 in the next seven days. McDermott International’s (MDR) implied volatility was 74% on April 6. That implies that MDR stock could range between $6.19 and $5.03 for the next seven days. Weatherford International’s (WFT) implied volatility was 82% on April 6. That implies that WFT stock could vary between $2.62 and $2.08 in the next seven days.
Crude oil’s implied volatility
On April 6, crude oil’s implied volatility was 23.1%. Since January 22, 2018, crude oil’s volatility has increased. HAL’s implied volatility also increased during that period.
Next, we’ll take a look at crude oil’s correlation with HAL.