Jon Najarian’s Gutsy MF Global Trade

Oct 26, 2011
J. Webster
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CNBC’s Fast Money regular and co-founder of OptionMonster.com, Jon Najarian, made a very gutsy trade in MF Global today. The stock was said to be on the verge of complete collapse when he stepped in to make the trade. Talk about buying stocks when there’s blood on the streets, this was one of those cases.

After a poor earnings release due to weaker-than-expected trading revenue and fears about the company’s exposure to European debt (rumored to be upwards of $6 billion), the stock plummeted. Yes, the entire market cap for the company wasn’t even worth $1 billion a few days ago. This looks like another case of over leveraging on Wall Street.

In August the stock (MF) was trading for $7 a share. This morning it touched down to $1.07 a share. What’s more, the stock was trading for $3.22 a share just five days ago. However, what with such a huge drop in price, well over 50%, it was ripe for some traders to take a gamble and go long. One trader who had the guts to buy the stock was Jon Najarian.

We reached out to Mr. Najarian via Twitter to learn a little more about this risky trade. It looks like he got in with an average price of $1.23 and got out around $1.75 a share, a nice .52 increase. However, we can only really guess as to how big this trade was – meaning just how much he wagered or how many shares he bought. He does say Cha-Ching though, so must have been a nice sum.

MF Global is run by former Goldman Sachs executive and New Jersey Gov. Jon Corzine. It seems the company is now looking for a buyer to save them. Dick Bove saying one of those prospective buyers could be Goldman Sachs. And at least that’s the hope for MF Global at this point. Meanwhile, the percentage of shorts in MF Global is around 17%.

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