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Estimating Marathon’s Stock Price Based on Its Implied Volatility

Michelle Rey
Estimating Marathon’s Stock Price Based on Its Implied Volatility

Let’s now forecast Marathon Petroleum’s (MPC) stock price up until July 26, when the company is expected to post its Q2 2018 earnings. We’ll use its implied volatility, which has risen by 2.9 percentage points in the past month to 30.5%. Assuming a normal distribution of prices, standard deviation of one, and probability of 68.2%, Marathon stock could close between $76.50 and $67.10 in the next 17 calendar days.