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Short Interest in WMB Stayed Low Last Week

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Apr. 4 2017, Updated 10:37 a.m. ET

Short interest in Williams Companies

Short interest in Williams Companies (WMB) as a percentage of float has come down to 1.4%. The ratio is lower compared to the past-one-year average of 2.5%. Moreover, it’s lower than the historical three-year average of 2.4%, which might indicate a bullish sentiment.

The above chart shows a one-year closing price and short interest as a percentage of float for WMB. Short interest is the number of shares sold short, whereas short interest as a percentage of float is the number of shares sold short divided by floating shares. High short interest or sudden increase in short interest generally indicates pessimism about a stock. However, this might not necessarily result in a stock price decline as short position holders try to cover their short positions, which might 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 3.4%. Short interest in WMB as a percentage of float is below the industry average. Sunoco LP (SUN), Boardwalk Pipeline Partners (BWP), and Golar LNG Partners (GMLP) are among the AMZ constituents that have the highest short-interest-to-float ratios.

Put-call ratio

The put-call ratio also measures investors’ sentiment towards a stock. A high put-call ratio might indicate that a large number of investors expect the stock price to fall in the future and vice versa. WMB has a put-call ratio close to zero.

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