Flotek Industries Inc (NYSE:FTK) Risk Hits An Elevated LevelDate Published: 2017-04-21
No Risk Alert Here: Before we dive into any analysis we simply note that Flotek Industries Inc (NYSE:FTK) risk is neither elevated nor depressed. We'll detail it below -- but that's the lede -- the option market is in a holding period with an IV30 of 60.5% verus the IV30 of the S&P 500 at 11.15%. You might say that the post it note for Flotek Industries Inc would read, "holding pattern." The annual high for Flotek Industries Inc IV30 is 100.33%.
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This is a proprietary risk rating and risk alert system that looks forward for the next month -- or really 30 days to be exact -- and that includes weekends. The system is based on multiple interactions of data points, many of which come directly from the option market for Flotek Industries Inc (NYSE:FTK) . The creator of this model is Capital Market Laboratories (CMLviz.com).
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But first, let's turn back to FTK and the company's risk rating:
We also take a peek at the implied vol for the Materials ETF (XLB), our broad based proxy for FTK.
|S&P 500 IV30||11.15%|
|Nasdaq 100 IV30||12.44%|
|FTK HV 30||38.17%|
|FTK Current IV30||60.5%|
|52 Week Low IV30||46.06%|
|52 Week High IV30||100.33%|
This is a highly unusual situation for Flotek Industries Inc (NYSE:FTK) , where a company in the normally low risk Chemicals sector shows an elevated level of risk.
The implied price swing risk as reflected by the option market has hit an elevated level relative to the company's past. The option market reflects a 95% confidence interval stock price range of ($10.00, $13.20) within the next 30 calendar days.
FTK OPTION MARKET IMPLIED PRICE SWING RISK
The IV30® is the implied price swing risk reflected by the option market in the stock price for the next 30 calendar days -- it's forward looking. Flotek Industries Inc shows an IV30 of 60.5%, which is an elevated level for the company relative to its past.
The option market for FTK has shown an IV30 annual low of 46.1% and an annual high of 100.3%, meaning that FTK is at the 27% percentile right now. Here's a table of the data before we dig into the implied price swing risk rating further.
The implied stock swing risk from the option market has created a range which is tighter in the next 30 calendar days for Flotek Industries Inc (NYSE:FTK) than it has been on average for the last year on average.
We have an unusual situation now where the IV30 is depressed relative to the past, but even with that risk pricing, the option market reflects the likelihood of a greater stock movement in the next 30-days than the stock has realized in the last 30-days. Let's turn to a chart to see what's going on.
Flotek Industries Inc Risk Rating
The FTK risk rating is at 3.5, where the rating goes from one (the lowest risk) to five (the highest risk). The driving factors for the 3.5 rating are:
↪ The IV30 is below the annual average.
↪ The IV30 is above 60%.
↪ The HV30 is below the 20th percentile.
↪ The IV30 is above the HV30.
↪ The stock has moved +20.7% over the last 3-months which does indicate some elevated risk.