Jefferies (JEF) and sovereign debt exposure

I've been long with insiders since September lows and the past few days have been interesting to say the least.

My net exposure to JEF is insignificant. Really, it is. I mean, really!

At what price are you short?

 

Not short - the additional disclosure in the middle of the day was enough to placate most concerns, so I covered.

But I might short it tomorrow.

 

JEF provides weekend update on European sovereign debt holdings

http://www.zerohedge.com/news/eagerly-awaiting-jefferies-cusip-level-european-exposure-update

http://www.jefco.com/

http://www.jefco.com/html/OurFirm/N...11/FINALPositionDisclosuresummaryonlyNov4.pdf

 

Jefferies Group Inc. (JEF) climbed as much as 8.5 percent after it cut gross holdings in sovereign securities of Portugal, Italy, Ireland, Greece and Spain by almost 50 percent since last week’s close of trading to show how easily it can reduce funds at risk.

The stock rose 7.1 percent to $12.93 at 9:35 a.m. in New York. Jefferies lowered both long and short trading positions by about $1.1 billion, the New York-based firm said today in a statement. The move “resulted in no meaningful profit or loss on today’s trading activity or our remaining positions,” it said.

“We undertook this reduction in our holdings solely to demonstrate the liquid nature of this market-making trading book,” Chief Executive Officer Richard Handler and Executive Committee Chairman Brian Friedman said in the statement. “We will now resume our normal market-making activities and serve our clients around the world.”

Jefferies slumped 18 percent last week as Egan-Jones Ratings Co. downgraded the firm’s debt, citing large “sovereign obligations” relative to equity. The reductions announced today left Jefferies with net exposure to the nations’ sovereign debt of about $59 million, or 1.7 percent of shareholder equity, carrying “negligible market or credit risk,” Jefferies said in the statement.

http://www.bloomberg.com/news/2011-11-07/jefferies-cuts-europe-sovereign-holdings.html

All the hype was nothing more than "hot air" caused by MF Global´s incompetence to run an orderly bond trading book.

 

Jefferies December $6 puts changed hands 40,640 times on Nov. 4 as they dropped to 30 cents. The four most-traded puts -- all of which expire in December and have strike prices at $5, $6, $10 and $11 -- declined in value as Jefferies shares climbed 0.5 percent, avoiding losses in the stock market that drove the Standard & Poor’s 500 Index down 0.6 percent.

Long $5,$6,$10 and $11 Dec calls. ;=)

 

I wonder how long til they dump the other 50%? they probably had some good opps in last week.

 

Jefferies leads financials. Last print +23,64 %.