January 23rd, 12:31 pm by Barbara Zigah
(eToro Blog) Media reports over the weekend, one bad and one not-so-bad, sent investors of the Euro-Dollar into defensive mode. Since the currency markets opened for the trading week, bearish posturing has been the norm and it’s no different among traders on the OpenBook who have been selling short by a ratio of 15 to 1. Guru NMarijus, who late last week closed off his two longs with a loss, appears now to be solidly in the bear’s camp with two short positions. However, trader pyruss, who had said he wanted to take the weekend to possibly reconsider his positioning, may be expecting a short bull run as he earlier opened up a long position in the Euro-Dollar targeting 1.2930 which is already in the money.
What has happened over the weekend isn’t yet entirely clear; one report said that Greece’s private bondholders had declared that they were not in a position to accept any “haircuts” – which meant additional losses – beyond that which is agreed. Some sources put the haircut at around 65% or 70%, though some analysts have suggested that not even a 100% would be a sufficient stopgap for a possible Greek default. The Greek government must see its current debt burden reduced by €100 billion in order to survive the March debt redemption.
Though the deal wasn’t finalized, insiders point out that that doesn’t necessarily mean there has been a breakdown, and rumors that the steering committee co-chairs abruptly left the talks were erroneous as the discussions were expected to continue by phone.
For OpenBook’s gurus it all boils down to the outcome of the Greek private bondholder negotiations. If they believe the market is pricing in a deal, they’ll go long, but without one they’ll short the Euro and adjust their positions accordingly in anticipation of a Greek default in March.
Later today, the European finance ministers will meet once again to work out the minutiae of the second emergency bailout for Greece, now factoring in this weekend’s events. The majority of OpenBook traders have little faith that a deal will be quickly pulled together, hence the generally bearish tone. One guru who appears to have a little more confidence in the process is eToro trader jagadeesan777, with almost 1200 followers and 80 copiers; he earlier opened a long position targeting 1.2977 which he closed a little later taking a 10% gain. Late last week, he closed two longs as well, and took profits of 17% and 24%, respectively. Trader jagadeesan’s P& L has steadily increased over the past 12 months, and is approaching 163%.
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