Looking at NRG Energy’s Implied Volatility Trends



Implied volatility

On January 8, the implied volatility in NRG Energy (NRG) stock was close to 30%—lower than its 15-day average volatility. Recently, the Utilities Select Sector SPDR ETF’s (XLU) implied volatility was 18%.

NRG iv

The implied volatility represents investors’ unease. Rising volatility is usually related to falling stock prices. Broader markets witnessed increased volatility in the last few months. Usually, broader markets’ implied volatility levels are lower than utilities at large.

NRG Energy is one of the most volatile stocks among utilities. Recently, NextEra Energy (NEE) and Southern Company’s (SO) implied volatility was ~20%.

PG&E (PCG) was the most volatile stock in utilities. On January 8, PG&E’s implied volatility was 111%. In November, the wildfires in California changed the company’s fortunes. To learn more, read PG&E Stock Loses ~30% in Two Trading Sessions.

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