Implied volatility in Marathon Petroleum
Marathon Petroleum (MPC) is scheduled to post its first-quarter earnings on May 8. The company is expected to post higher earnings due to integration benefits from Andeavor. Also, a better refining crack environment is expected to increase the company’s earnings.
We’ll discuss Marathon Petroleum’s (MPC) stock price forecast range based on its implied volatility for 20 days before its earnings. The implied volatility in Marathon Petroleum has risen by 6.1 percentage points since March 22 to the current level of 31.9%.
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Price range forecast
Marathon Petroleum’s stock price range is estimated considering its implied volatility of 31.9%, assuming a normal distribution of prices and standard deviation of one, which means a probability of 68.2%. Marathon Petroleum’s stock price could close between $64.3 and $55.4 per share in the next 20 calendar days ending on May 8.
Peers’ implied volatility trend
Like Marathon Petroleum, the implied volatility in Phillips 66 (PSX), Delek US Holdings (DK), and HollyFrontier (HFC) has risen by 0.8 percentage points, 1.8 percentage points, and 3.9 percentage points, respectively, since March 22. Currently, the implied volatility in Phillips 66, Delek US Holdings, and HollyFrontier is 23.2%, 39.1%, and 35.2%, respectively.
If we consider the stocks prices during the same period, then Phillips 66 and HollyFrontier have fallen 0.6% and 6.5%, respectively. These refining firms’ implied volatilities and stock prices have moved inversely in the past month. However, Delek US Holdings stock has risen 4.7% in the same period.