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Short Interest in Energy Transfer Equity Is above Industry Average

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Short interest in Energy Transfer Equity

Short interest in Energy Transfer Equity (ETE) as a percentage of float ratio has come down to 4.9%. This ratio is lower than its 2016 average of 6.4% and is higher than its historical three-year average of 4.7%. This could indicate bearish sentiment in ETE.
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The chart above shows the one-year closing price and short interest as a percentage of float for ETE. Short interest is the number of shares sold short, whereas short interest as percentage of float is the number of shares sold short divided by the number of floating shares.

A high percentage of short interest or an increase in short interest generally indicates pessimism about the stock. However, this may not necessarily result in a stock price decline as short position holders try to cover their short positions, which could result in a stock rally.

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Industry average

The Alerian MLP Index (AMZ), which tracks 50 energy MLPs, has an average short interest as a percentage of float of ~2.5%. The short interest in ETE as percentage of float ratio is above the industry average.

Sunoco LP (SUN), Tallgrass Energy Partners (TEP), Golar LNG Partners (GMLP), and DCP Midstream Partners (DPM) are among the AMZ constituents that have the highest short interest to float ratios.

Put–call ratio

The put–call ratio is another measure to look at investor sentiment toward a stock. A high put–call ratio could indicate that a large number of investors expect the stock price to fall, and vice versa. ETE has a put–call ratio of 1.02.

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