Southwestern Energy’s implied volatility
As of May 25, Southwestern Energy (SWN) had an implied volatility of 54.2%, which is lower than 62.2% at the end of the first quarter. It increased to 54.2% due to a 2% decline in the stock.
SWN’s price range forecast
Based on Southwestern Energy’s implied volatility of 54.2% 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 $4.78 and $4.12 in the next seven days. The stock should stay in that range 68% of the time. On May 25, SWN stock closed at $4.45.
Peer price range forecasts
As of May 25, Range Resources (RRC) had an implied volatility of 47.6%, which means that RRC stock is expected to close between $16.19 and $14.21 in the next seven days. On May 25, RRC stock closed at $15.20. Like SWN, RRC is primarily a natural gas producer.
As of May 25, the First Trust ISE-Revere Natural Gas ETF (FCG) had an implied volatility of 29.5%, which means FCG is expected to close between $23.14 and $21.32 in the next seven days. On May 25, FCG closed at $22.23. FCG represents an index of energy stocks that derive a substantial portion of their revenues from the exploration and production of natural gas.
On May 25, SWN’s peers California Resources (CRC) and ConocoPhillips (COP) had implied volatilities of 78.2% and 26.1%, respectively. Based on the inputs used in the calculation of price range, there’s a 68% probability that these stocks will close in their ranges for the given period.