Energy Transfer Equity’s implied volatility
Energy Transfer Equity’s (ETE) 30-day implied volatility was 29.6% on March 9, 2018, significantly lower than its 15-day average of 32.3%. At the same time, peers Kinder Morgan (KMI) and Williams Companies (WMB) had implied volatility of 21.0% and 20.5%, respectively, and the Alerian MLP ETF (AMLP) had implied volatility of 21.3%. ETE’s higher implied volatility may be due to Energy Transfer Partners’ (ETP) higher commodity price exposure and dependence upon limited partnerships for distribution income.
Energy Transfer Equity’s price forecast
Based on its current implied volatility, ETE might trade between $14.86 and $16.16 in the next seven days. The general partner is expected to trade in this range 68.0% of the time, assuming a standard deviation of one and a normal distribution of prices. In the next article, we’ll look at Energy Transfer Equity’s current distribution yield.