Forecasting OAS Stock Price with Implied Volatility



Oasis Petroleum’s implied volatility

The current implied volatility in Oasis Petroleum’s (OAS) stock is 47.23%. That’s ~12.4% lower than its 15-day average of ~54%. In comparison, OAS’s peers Concho Resources (CXO) and Apache (APA) have implied volatilities of ~28.63% and ~33.8%, respectively.

Implied volatility is an options model–based estimate that provides information on how a stock could move in the market in a given period. In a bullish market, implied volatility is likely to decline, while in a bullish market, the opposite could happen.

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Forecasting the price range for Oasis Petroleum’s stock

Based on Oasis Petroleum’s implied volatility of ~47.23%, and assuming a normal distribution of stock prices and a standard deviation of 1 (or a probability of 68%), we can say that Oasis Petroleum’s stock could close between $8.78 and $14.16 in the next three months.

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