5/15/2017 – Energy Transfer Partners (ETP)

Attention, those of you who own Energy Transfer Partners (ETP): ETP has merged with Sunoco Logistics (SXL), and has enacted a 3 for 2 stock split as a result. ETP owners have received 3 shares of the new ETP for every 2 shares owned of the old ETP. For example, if you previously owned 100 shares of the old ETP, you will now have 150 shares of the new ETP.

Because of this merger, you should sell your shares of ETP on Trade Day, and Transmogrify if necessary.  If you are able to sell your shares above your average cost, or if calls are assigned for all of your outstanding shares, there is no need to Transmogrify.

We’re here to help! Here is a link to the Transmogrification document that will tell you step-by-step what to do.

Standard Lattco Clients: You will need to properly calculate the Price of Old Stock for ETP, and the appropriate number of shares to purchase in your new position, in order to Transmogrify ETP. To do this, take the number of shares that you currently own in your brokerage account of ETP, and divide the total by 1.5; you will then take the price you were paid for these shares, and multiply it by 1.5. For example, if you own 450 shares of ETP, and you sell them for $24 per share, you will divide 450 by 1.5, and multiply $24 by 1.5, giving you a Price of Old Stock of $36, and indicating that you will purchase 300 shares of the new position.

Lattco PRO / Lattco AutoPilot Clients: We will automatically adjust any ETP positions that are still open by Trade Day to account for the reverse stock split. This will allow the position to close when you sell off your shares of ETP.

Please also note if you need to Transmogrify, you will need to calculate the Price of Old Stock and number of shares to purchase in the same manner that Standard Lattco clients will need to, as explained in the previous example.

Please use this link to access the transmogrification document for your accounts. Also, please give us a call after you have purchased shares for your new position and before your sell your options; we will need to make some adjustments to your account to properly reflect the transmogrification.

Lattco AutoPilot clients:  At this time, trading screens for Transmogrification are not included in the AutoPilot system.  You will need to log into Ally Invest to place three orders to complete the Transmogrification process:

  1. Sell your existing shares
  2. Buy the correct amount of shares for your new stock (the total amount of ETP shares divided by 1.5).
  3. Sell to Open a put at the top of the lower band to replace the purchase for the current month if you don’t own 10x your Level

Once this is complete please notify us and we will adjust your AutoPilot account so that it can suggest the appropriate call option orders.

If you have any questions, please don’t hesitate to contact us at support@snideradvisors.com or 1-888-6-SNIDER. We’ll be happy to walk you through the process.