uploads///SWN_WU_Implied Volatility

Southwestern Energy: Trading Range Forecast for Next Week


May. 16 2018, Updated 9:03 a.m. ET

Southwestern Energy’s implied volatility

As of May 14, Southwestern Energy (SWN) had an implied volatility of 44.3%, which is lower than 62.2% at the end of the first quarter. Last week, its implied volatility decreased from 54.8% to 44.3% due to an 8% rise in the stock.

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SWN’s price range forecast

Based on Southwestern Energy’s implied volatility of 44.3% and assuming a normal distribution of prices, 365 days in a year, and a standard deviation of one, SWN stock is expected to close between $4.69 and $4.15 in the next seven days. The stock should stay in that range 68% of the time. On May 14, SWN stock closed at $4.42.

Peer price range forecasts

As of May 14, Range Resources (RRC) had an implied volatility of 40.9%, which means RRC stock is expected to close between $15.60 and $13.92 in the next seven days. On May 14, the stock closed at $14.76. Just like SWN, RRC is primarily a natural gas producer.

As of May 14, the First Trust Natural Gas ETF (FCG) had an implied volatility of 23.8%, which means it’s expected to close between $23.55 and $22.05 in the next seven days. On May 14, FCG closed at $22.80. FCG represents an index of energy stocks that derive the substantial portion of their revenues from the exploration and production of natural gas.

Based on the inputs used in the calculation of price range, there’s a 68% probability that these stocks will close in their range for the given period.


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