Energy Transfer Equity’s Implied Volatility Rose the Most

High implied volatility in midstream stocks

On April 12, 2017, Teekay LNG Partners (TGP) had an implied volatility of 37.8%, the highest among the midstream companies in the Alerian MLP ETF (AMLP). TGP’s current volatility is 0.90% above its 15-day average.

Energy Transfer Equity’s Implied Volatility Rose the Most

Remember, stocks that see large movements—or ones that are expected to see large movements in the future—can have high implied volatilities.

We’ll analyze Teekay LNG Partners’ returns in the next part of this three-part series. But first, let’s take a look at a few other midstream stocks with high implied volatilities as of April 12, 2017:

  • Energy Transfer Equity (ETE): implied volatility of 35.5%, or 11.4% above its 15-day average
  • EnLink Midstream Partners (ENLC): implied volatility of 33.6%, or 3.4% below its 15-day average
  • Rice Midstream Partners (RMP): implied volatility of 31.6%, or 0.80% below its 15-day average
  • Enable Midstream Partners (ENBL): implied volatility of 31.0%, or 8.3% above its 15-day average

The recent rise in Energy Transfer Equity’s (ETE) implied volatility compared to its 15-day average represents the largest increase of the five midstream stocks with the highest implied volatilities.

On April 12, 2017, Energy Transfer Equity’s implied volatility rose 5.0%, while the stock fell 0.80%. On March 30, 2017, ETE announced its $300.0 million preferred equity investment in Sunoco (SUN).

Midstream stocks with low implied volatilities

Midstream stocks with the lowest implied volatilities on April 12, 2017, include the following:

  • Magellan Midstream Partners (MMP): implied volatility of 16.8%, or 7.2% more than its 15-day average
  • Enterprise Products Partners (EPD): implied volatility of 16.9%, or 1.7% more than its 15-day average
  • Buckeye Partners (BPL): implied volatility of 19.3%, or 14.5% more than its 15-day average
  • Boardwalk Pipeline Partners (BWP): implied volatility of 20.2%, or 5.9% lower than its 15-day average
  • Tesoro Logistics (TLLP): implied volatility of 21.1%, or 0.70% lower than its 15-day average

In the next part, we’ll look at the stock movements of the midstream stocks with the highest implied volatilities.