Benzinga’s Securities Lending Volatility Index (SLVX) Powered by Tidal Markets, is an indicator that forecasts stock market activity for broader indices and individual securities by examining lending trades to measure volatility.
To demonstrate the use of the SLVX as a stock market indicator, we show how changes in the SLVX predicted a 24.50 percent decline in Turtle Beach Corp (NASDAQ: HEAR) towards the middle of March.
Turtle Beach Corporation provides consumer electronic gaming headset products for various platforms, including video game and entertainment consoles, personal computers, and mobile and tablet devices under the Turtle Beach brand.
At the beginning of March, HEAR was trading in a range between $15-$16 per share, a range it had held for most of 2019. During this time, the SLVX began to rise dramatically from 13 to over 400, signifying a sharp market decline was imminent.
As the stock peaked on March 14 at $16.25, the SLVX denoted volatility values at over 400. On the following day, the stock began to pull back sharply, falling 18.65 percent before closing at $13.32.
Over nine trading days from peak-to-trough, HEAR lost 33.96 percent in value and hit a low for the move of $10.73 on March 26.
On the beginning day of our analysis, Feb. 21, the SLVX reflected a volatility rate of 13.95, but as HEAR began to fluctuate in price over the next three weeks, the SLVX jumped to over 300 – anticipating a major event was on the horizon.
Overall between February 21-April 15, Turtle Beach lost 24.50 percent, or $3.89 per share, with the SLVX rising in correlation. As the stock began to regain value entering the first few weeks of April, the SLVX quickly diminished, signifying the stock’s period of declination was ending and a buying opportunity was indicatively presenting itself.
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