Gulfport Energy: Stock Breaches 14-Year Highs, Volatility Hits Lows
Ophir Gottlieb | Aug 27, 2013 01:35AM ET
Gulfport Energy Corporation (GPO) is an independent oil and natural gas exploration and production company with its principal producing properties located along the Louisiana Gulf Coast in the West Cote Blanche Bay, or WCBB, and Hackberry fields, and in West Texas in the Permian Basin.
I found this stock using a real-time custom scan. This one hunts for depressed vols. I note that the implied is at multi-year lows while the stock price is at multi-year highs; in fact all-time 14-year highs. This is yet another case where it feels like market complacency (or malaise) with respect to the option volatility has taken over.
Custom Scan Details
Stock Price GTE $5
IV30™ GTE 20
IV30™ Percentile LTE 10
Average Option Volume GTE 1,200
The two-year GPOR Charts Tab is included (below). The top portion is the stock price; the bottom is the vol (IV30™ - red vs HV20™ - blue vs HV180™ - pink).
On the stock side we can see the price is now at multi-year highs. How many years? How about an all-time high going back pre-year 2000? Yeah, that kind of multi-year high. We can see that a little more than a year ago this was a $15 stock and is now nearly 400% that level.
But what about the vol? Well, let’s turn to the two-year IV30™ chart in isolation, below.
We can see the implied hit as high as 95% in fall of two-years ago, but now is at a multi-year low, trading in the low 30% range. Incredible… yes the firm just released earnings, and yes that means a vol crush, and yes volatility goes down (generally) as stock prices rise, but no, a multi-year low in volatility does not make a lot of sense to me when it coincides with a 14-year high in stock price.
Finally, let's look to the Options Tab (below).
Across the top we can see the monthly vols are priced to 32.81% for Sep and 35.70 %for Oct. I would put a big golden star next to this name on my watchlist and watch the price action (realized volatility) relative to the implied volatility.
Get The News You Want
Disclosure: This is trade analysis, not a recommendation.
Images provided by Livevol®
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.