Halliburton’s implied volatility
Halliburton’s (HAL) implied volatility was 23.3% on May 11. On April 23, the day Halliburton released its 1Q18 earnings, its implied volatility was 24.9%. Since then, Halliburton’s implied volatility has decreased marginally.
Halliburton comprises 3.2% 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 risen 6.0% since April 23 versus an unchanged stock price for HAL during the same period. Implied volatility signals a stock’s potential price movement from the perspective of option holders.
Halliburton’s seven-day stock price forecast
Halliburton (HAL) stock is expected to close between $50.60 and $53.96 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, a standard deviation of 1.0, and a probability of 68.2%. HAL’s stock price was $52.28 on May 11.
Implied volatility for HAL’s peers
TechnipFMC’s (FTI) implied volatility on May 11 was 29.1%, which implies that FTI’s stock price can vary between $30.72 and $33.30 for the next seven days.
Tidewater’s (TDW) implied volatility was 51.6% on May 11, which implies that TDW’s stock price can range between $31.80 and $36.70 for the next seven days.
Weatherford International’s (WFT) implied volatility was ~54.0% on May 11. This metric implies that WFT’s stock price can vary between $3.05 and $3.55 in the next seven days.
Crude oil’s implied volatility
On May 11, crude oil’s implied volatility was 23.7%. Since April 23, crude oil’s volatility has decreased, while HAL’s implied volatility also decreased during the same period.
In the final part of this series, we’ll discuss crude oil’s correlation with HAL.