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Energy Transfer’s Implied Volatility Trends


Mar. 28 2019, Updated 8:04 a.m. ET

Implied volatility

Recently, Energy Transfer (ET) stock had an implied volatility of 23%, which is close to its 15-day average volatility. The implied volatility indicates investors’ unease. Rising volatility is usually related to falling stock prices. The volatility in Energy Transfer stock has fallen lately from its long-term average volatility levels of 30%. The stock reached close to 50% in late December. The stock fell below ~$12.0.

In comparison, SPY’s implied volatility was close to 13%, while Williams Companies’ (WMB) implied volatility was 18%. The Alerian MLP ETF (AMLP) had an implied volatility of ~19% on March 26.

Energy MLP’s higher volatility levels compared to broader markets suggest investors’ unease. MLPs might look attractive due to their yields. However, MLPs can be risky at times. To learn more, read Investing in MLPs: Why Yield Isn’t Everything.

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