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Implied Volatility in Whiting Petroleum: Forecasting Stock Range

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Implied volatility trends

Current implied volatility in Whiting Petroleum (WLL) is ~49.9%, 0.20% higher than its 15-day average of 49.8%. In contrast, the broader energy sector represented by the Energy Select Sector SPDR ETF (XLE) has an implied volatility of ~17.4%, -4.8% lower than its 15-day average of ~18.3%.

Forecasting WLL’s stock price range

Based on Whiting Petroleum’s implied volatility of ~49.9% and assuming a normal distribution of stock prices with a standard deviation of one (or a probability of 68.0%), Whiting Petroleum stock will likely close between $50.0 and ~$57.24 by the end of the week leading up to June 18.

WLL’s peer Continental Resources (CLR) has forecast a stock price range of $62.68–$68.88 based on an implied volatility of 34% at the end of the week leading up to June 18. In the same period, Concho Resources (CXO) will likely close between $123.68 and $135.58 based on its implied volatility of 33.1%. Hess Corporation (HES) is expected to range between $59.20 and $64.40 based on its implied volatility of 30.4% in the same period.

In comparison, XLE is likely to close between $75.44 and $79.16 based on its implied volatility of ~17.4%.

In the next article, we’ll discuss analysts’ opinions on Whiting Petroleum.

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