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Shell Stock: What to Expect by the End of Q2

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Jun. 4 2019, Updated 10:02 a.m. ET

Shell stock

The implied volatility in Royal Dutch Shell (RDS.A) has risen by four percentage points since April 1 to the current level of 20%. During the same period, Shell stock has fallen 1%. Shell stock and its implied volatility have moved inversely in the second quarter.

Considering Shell’s implied volatility of 20% and assuming a normal distribution of prices and one standard deviation with a probability of 68.2%, Shell’s stock price could close between $65.2 and $58.4 per share in the next 28 calendar days ending June 28.

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Peers’ implied volatility

Similarly, the implied volatility in Shell’s peers has risen. The implied volatility in PetroChina (PTR) has increased by four percentage points since April 1 to 26%. The implied volatility in Total (TOT) and ENI (E) has risen by six percentage points and three percentage points, respectively, during the same period. Currently, the implied volatility in Total and ENI is 22% and 21%, respectively. If we review the companies’ stock performances since April 1, then PetroChina, Total, and ENI stocks have fallen 15%, 8%, and 15%, respectively.

The implied volatility in the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY), which closely resemble the Dow Jones Industrial Average and the S&P 500 Index, respectively, have risen.

The implied volatility in DIA and SPY have risen by five percentage points and six percentage points, respectively, since April 1 to the current levels of 18% and 17%, respectively. During the same period, DIA and SPY’s values have fallen 4% and 3%, respectively.

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