Bears Eye Halted Leucadia National Corporation (LUK)

Leucadia National Corp. (LUK) could rescue FXCM Inc (FXCM), sources say

Jan 16, 2015 at 1:22 PM
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The shares of Leucadia National Corp. (NYSE:LUK) were halted this afternoon, amid buzz that the Jefferies Group LLC parent is considering a multi-million-dollar rescue package for battered FXCM Inc (NYSE:FXCM) -- the primary (but not the only) victim of the Swiss franc's rally. Prior to the halt, the shares of LUK were up 0.9% at $21.84, and both options traders and short sellers have been upping the bearish stakes of late.

On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open nearly two LUK puts for every call during the past couple of weeks. The resulting 10-day put/call volume ratio of 1.95 stands higher than 96% of all other readings during the past year, pointing to a healthier-than-usual appetite for bearish bets.

Short interest on LUK grew 35.5% during the past two reporting periods. However, these pessimistic positions account for just 2.3% of LUK's total available float, representing not even four sessions' worth of pent-up buying demand, at the stock's average pace of trading.

On the charts, Leucadia National Corp. (NYSE:LUK) has surrendered roughly 22% of its value during the past year, with rebound attempts stifled by its 20- and 32-week moving averages. In mid-December, the stock touched a two-year low of $20.96.

Weekly Chart of LUK since January 2014 with 20-Week and 32-Week Moving Averages
 

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