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Stock Volatility Risk Alert: Teladoc Inc Stock Volatility Hits An Unsually High Level




Teladoc Inc (NYSE:TDOC) Stock Volatility Hits An Unsually High Level

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Stock Risk Alert
Before we cover the full analysis we make a quick alert here that Teladoc Inc (NYSE:TDOC) has seen its stock price whip around at a notable high level. We'll go through the details below -- but that's the lede -- the stock has been moving and the market's reaction is like a yellow post it note on the face of the ticker that reads "this is not equilibrium" with an HV20 of 36.55% verus the HV20 of the S&P 500 at 6.43%.



Another bit to this risk alert, which we cover in the article, is that while the historical volatility may be a notable high level (the stock has been whipping around), the real question that needs to be answered for option traders is not if the HV20 is high, but rather if the implied volatility that is priced for the next 30-days accuratley reflects what we're about to see in the stock for the next month.

To jump forward and examine if owning or shorting options has been a positive trade in Teladoc Inc, you can go here: Getting serious about option trading.

PREFACE
This is a proprietary realized volatility rating created by Capital Market Laboratories (CMLviz) based on a large number of data interactions for Teladoc Inc (NYSE:TDOC) . We examine the little used gem of daily stock volatility over a 20-day and 30-day trading period, as well as comparisons to the last year and the actual stock returns over the last three- and six-months and the S&P 500 and Nasdaq 100 indices.


Option trading isn't about luck -- this four minute video will change your trading life forever: Option Trading and Truth

As a heads up, in the "Why This Matters" section at the end of this article on Teladoc Inc (NYSE:TDOC) , we're going to take a step back and show really clearly that there is actually a lot less "luck" in successful option trading than most people are aware of. This idea of an "option trading expert" is vastly over complicated so those with the information advantage can continue to profit at the expense of the rest.

But before that, let's turn back to TDOC. Here are the exact steps that led us to this rating, and whether it's a risk alert or a holding pattern.

TDOC Recent Stock Volatility


Rating
Stock volatility using proprietary measures has hit a notable high level. Let's take a deep dive into some institutional level volatility measures for Teladoc Inc (NYSE:TDOC) .

Teladoc Inc Stock Performance
TDOC is up +41.8% over the last three months and up +58.4% over the last six months. The stock price is up +128.4% over the last year. The current stock price is $26.45.

TDOC Step 1: Stock Returns
The one-year stock return does not impact the volatility rating since we are looking at a shorter time horizon. However, the rating does examine the 3-month returns and the absolute difference between the 3-month and 6-month returns.

  The 3-month stock return of +41.8% has a large impact on the stock volatility rating for TDOC.
  The greater than 10% difference between the 3-month and 6-month stock returns has an impact on the stock volatility rating for TDOC.

TDOC Step 2: Daily Stock Volatility Level
The HV30® takes the stock's day to day historical volatility over the last 30-days and then annualizes it. The HV20 looks back over just 20-days -- a shorter time period. Here is the breakdown for Teladoc Inc (NYSE:TDOC) and how the day-by-day stock historical volatilities have impacted the rating:

  The HV20 of 32.3% is in the middle ground, neither elevated nor depressed, so in this case the raw HV20 number has no impact on TDOC's volatility rating.


TDOC Step 3: Teladoc Inc HV20 Compared to Indices
* The HV20 for TDOC is substantially larger than that for both the S&P 500 and the NASDAQ 100 which raises the volatility rating.

* The HV20 for TDOC is substantially larger than that for the Health Care ETF (XLV) which raises the volatility rating.

Here is summary data in tabular and chart format.

           TDOC
           HV20    
   S&P 500
HV20
   NASDAQ 100
HV20   
   XLV
HV20   
           32.3%    6.43%    6.07%    5.57%

TDOC Step 4: Daily Volatility Percentiles and Highs

We also examine the annual high of the HV30 in our rating.
  The 52 week high in HV30 for TDOC is 81.7%, which is high and has an upward impact on the stock volatility rating.

Here is summary data in tabular and chart format.

           TDOC
           HV20    
   TDOC
HV30
   TDOC
HV30 High   
           32.3%    36.6%    81.7%

Final Stock Volatility Percentile Level: TDOC
The final evolution of the volatility rating for Teladoc Inc is a comparison of the HV30 value relative to its past, which is neatly summarized in the percentile -- a scoring mechanism that goes from a low of 1 to a high of 100.

  The HV30 percentile for Teladoc Inc is 10%, which means the stock has seen very low volatility in its price movement relative to its own past and that has a dampening impact on the stock volatility rating.

Teladoc Inc Realized Volatility Percentiles