What XLU’s Recent Implied Volatility Trends Indicate

On February 15, the Utilities Select Sector SPDR ETF’s (XLU) implied volatility was close to 12%—lower than its 15-day average volatility of ~13%. The implied volatility shows investors’ sentiment. Increasing volatility is associated with falling stock prices.

Although utilities are considered slow and steady stocks, their implied volatility has been higher than the S&P 500’s implied volatility. Among utilities, PG&E (PCG) had the highest volatility of ~63%. PG&E’s implied volatility has fallen significantly in the last few weeks. PG&E was close to 200% when the utility filed for bankruptcy late last month.

Top utility stocks including NextEra Energy (NEE) and Duke Energy (DUK) had an implied volatility of close to ~14%, while the S&P 500’s implied volatility was 13%.

To learn about the highest-yielding utilities, read Four Top-Yielding Stocks from S&P 500 Utilities.