Newpark Resources Inc (NYSE:NR) Risk Points versus Energy (XLE)Date Published: 2017-04-21
This is a scatter plot analysis of the critical risk points from the option market for Newpark Resources Inc (NYSE:NR) compared to its own past and the Energy ETF. In order to examine the forward looking risk for Newpark Resources Inc (NYSE:NR) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on NR, we make one critical note since we're talking about options:
Option trading isn't about luck -- this three minute video will change your trading life forever: Option Trading and Truth
In the "Why This Matters" section at the end of this article on Newpark Resources Inc (NYSE:NR) , we're going to take a step back and show in great specificity that there is actually a lot less "luck" in successful option trading than many people know.
But that's at the end, now let's jump back into the risk point charting and number crunching for Newpark Resources Inc (NYSE:NR) . We start by noting that NR is in the energy equipment and services sector which means along with some other industries we also compare the company to the closest match we could find, which was the Energy ETF (XLE) as a proxy for Newpark Resources Inc.
We have highlighted the IV30® for XLE and for NR in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||11.15%|
|Nasdaq 100 (QQQ)||IV30||12.44%|
|Energy ETF (XLE)||IV30||18.35%|
|Newpark Resources Inc (NYSE:NR)|
|NR 52 Week Low||IV30||42.27%|
|NR 52 Week High||IV30||116.53%|
|Newpark Resources Inc Implied Risk Scatter Plot|
|(a new risk chart, built for option traders)|
Scatter Plot Risk Legend
The blue point is the current 30-day implied volatility for Newpark Resources Inc.
The black point is the current 30-day implied volatility for the Energy ETF (XLE).
The red point is the 52 week low in IV30® for Newpark Resources Inc.
The green point is the 52 week high in IV30® for Newpark Resources Inc.
The various other scatter plot points in the middle give us risk context outside of the energy equipment and services sector.
The IV30® is the risk reflected by the option market in the stock price for the next 30 calendar days.
* We can see that the risk as reflected by the option market for the next 30-days for Newpark Resources Inc is above all the indices we have charted including the Energy ETF (XLE).
* We can further see that the current IV30 for Newpark Resources Inc of 50.22% is closer to the annual low of 42.27% than the annual high of 116.53%. Simply stated, this means that the option market is pricing less risk than the average over the past year.
* For some context, we note that the annual range in IV30® for the Energy ETF is between [13.82%, 30.9%] while Newpark Resources Inc has had a range of [42.27%, 116.53%].
Get this same analysis on any ticker here:
A New Kind of Risk Point Chart
This is chart was developed for the trader. It allows us to easily see where the forward looking risk for Newpark Resources Inc (NYSE:NR) lies relative to the last year, and the various major stock groupings and the Energy Equipment and Services sector without using time series data, which can confuse the information.