Implied volatility

On October 22, Southern Company (SO) stock witnessed an implied volatility of 20.0%—close to its 15-day average. In comparison, the Utilities Select Sector SPDR ETF’s (XLU) volatility was ~15.0%. The implied volatility shows investors’ nervousness. Higher volatility is usually associated with a fall in a stock’s price.

What Do Southern Company’s Volatility Trends Indicate?

Recently, the SPDR S&P 500 Trust ETF (SPY) had an implied volatility of 16.0%. Typically, utilities are seen as a safe and slow-moving sector. Broader markets seem more anxious amid increasing geopolitical tensions. The implied volatility touched one of the highest levels in 2018.

The implied volatility in PG&E (PCG) stock was 36.0%. NextEra Energy (NEE) and Duke Energy (DUK) each experienced an implied volatility of 17.0%.

Utilities were one of the favored sectors amid the market rout. To learn how utilities performed last week and where they might go from here, read Last Week in Utilities: How These Defensives Played Out.

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