Which Midstream Stocks Have the Highest Implied Volatility?

ETE leads midstream stocks

On March 6, 2017, Energy Transfer Equity (ETE) had an implied volatility of 33%—the highest among the midstream companies in the Alerian MLP ETF (AMLP). Its current volatility is 14% below its 15-day average.

Which Midstream Stocks Have the Highest Implied Volatility?

Remember, stocks that see large movements or that are expected to see large movements in the future could have high implied volatilities. We’ll analyze Energy Transfer Equity’s returns in the next part of this series, but first let’s take a look at some other midstream stocks with high implied volatilities as of March 6, 2017:

  • Teekay LNG Partners (TGP): 32.7%, or 14.7% below its 15-day average
  • EnLink Midstream Partners (ENLC): 31.7%, or 11.9% below its 15-day average
  • Rice Midstream Partners LP (RMP): 31.7%, or 1.7% below its 15-day average
  • Cheniere Energy Partners LP Holdings, LLC (CQH): 31.7%, or 0.8% below its 15-day average

On February 23, 2017, ETE’s implied volatility rose 8.2%, while the stock rose 0.3%. On February 22, 2017, ETE announced its 4Q16 earnings, reporting a quarterly net income of $0.21 per unit. (We’ll discuss another potential reason for ETE’s high implied volatility in Part 3 of this series.)

Midstream stocks with low implied volatilities

The midstream stocks with the lowest implied volatilities on March 6 included the following:

  • Magellan Midstream Partners (MMP): 15%, or 5.9% less than its 15-day average
  • Spectra Energy Partners (SEP): 16%, or 3.7% less than its 15-day average
  • Buckeye Partners (BPL): 16%, or 10.6% less than its 15-day average
  • Enterprise Products Partners (EPD): 17.1%, or 3.9% less than its 15-day average
  • Tesoro Logistics (TLLP): 18.5%, or 9.3% less than its 15-day average

In the next part of this series, we’ll look at the movements of midstream stocks with high implied volatilities.