Southwestern Energy’s implied volatility
As of June 4, Southwestern Energy’s (SWN) implied volatility was ~50.0%, lower than its implied volatility of ~62.2% at the end of the first quarter. In the last week (May 29–June 4), SWN’s implied volatility has fallen from ~54.2% to ~50.0% due to its stock price rising ~7%.
SWN’s price range forecast
Based on Southwestern Energy’s implied volatility of ~50.0%, a normal distribution of prices, 365 days in a year, and standard deviation of one, SWN stock could close between $5.10 and $4.44 in the next seven calendar days and stay in this range 68% of the time. On June 4, SWN stock closed at $4.77.
Peers’ price forecasts
As of June 4, Range Resources (RRC) had implied volatility of ~46.5%, which means it could close between $16.62 and $14.62 in the next seven calendar days. On June 4, RRC stock closed at $15.62. Like SWN, RRC is primarily a natural gas producer.
As of June 4, the First Trust Natural Gas ETF (FCG) had implied volatility of ~30.2%, which means FCG could close between $23 and $21.16 in the next seven days. On June 4, FCG closed at $22.08.
On June 4, peers California Resources (CRC) and Marathon Oil (MRO) had implied volatility of ~77.3% and ~36.3%, respectively. Based on the inputs used in the calculation of the above price ranges, there is a 68% probability that these stocks will close in these ranges during the week.
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