Vulcan Materials Company (NYSE:VMC) Risk Points versus Materials (XLB)Date Published: 2017-06-17
This is a scatter plot analysis of the critical risk points from the option market for Vulcan Materials Company (NYSE:VMC) compared to its own past and the Materials ETF. In order to examine the forward looking risk for Vulcan Materials Company (NYSE:VMC) the next 30-days, we must look to the option market.
Now, before we dive into the analysis on VMC, we make one critical note since we're talking about options:
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But that's at the end, now let's jump back into the risk point charting and number crunching for Vulcan Materials Company (NYSE:VMC) . We start by noting that VMC is in the construction materials sector which means along with some other industries we also compare the company to the closest match we could find, which was the Materials ETF (XLB) as a proxy for Vulcan Materials Company.
We have highlighted the IV30® for XLB and for VMC in the table below.
|CONTEXT: THE INDICES|
|S&P 500 (SPY)||IV30||8.34%|
|Nasdaq 100 (QQQ)||IV30||14.69%|
|Materials ETF (XLB)||IV30||12.83%|
|Vulcan Materials Company (NYSE:VMC)|
|VMC 52 Week Low||IV30||20.32%|
|VMC 52 Week High||IV30||34.07%|
|Vulcan Materials Company 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 Vulcan Materials Company.
The black point is the current 30-day implied volatility for the Materials ETF (XLB).
The red point is the 52 week low in IV30® for Vulcan Materials Company.
The green point is the 52 week high in IV30® for Vulcan Materials Company.
The various other scatter plot points in the middle give us risk context outside of the construction materials 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 Vulcan Materials Company is above all the indices we have charted including the Materials ETF (XLB).
* We can further see that the current IV30 for Vulcan Materials Company of 23.9% is closer to the annual low of 20.32% than the annual high of 34.07%. 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 Materials ETF is between [11.21%, 25.75%] while Vulcan Materials Company has had a range of [20.32%, 34.07%].
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 Vulcan Materials Company (NYSE:VMC) lies relative to the last year, and the various major stock groupings and the Construction Materials sector without using time series data, which can confuse the information.