http://www.zerohedge.com/article/greece-proceeds-make-bond-shorting-impossible
Martinghoul - is this more scaremongering by ZH or does this have merit?
Greek trading system HDAT, which is run by the central bank, told primary dealers of Greek sovereign debt the move was a response to the scale of open short positions on such bonds, according to a copy of the HDAT document obtained by Reuters.
This week financial markets hammered Greek bonds and bank shares, driving the euro zone member's borrowing costs higher and pushing it closer to tapping a last-resort European Union-International Monetary Fund safety net.
"Due to massive debit position in HDAT transactions, the Committee of Primary Dealers Supervision and Control decided as of today and until further notice to automatically proceed to repo auctions, at the end of HDAT trading day, in order to cover all transactions with such debit positions," the statement obtained by Reuters said.
Traders said the decision meant that any uncovered short positions on Greek government bonds would have to be covered, regardless of the price, at the end of the settlement day in the repo auction.
This would make it more difficult to short Greek bonds but might end up affecting market makers more than others, according to some traders.
Year-over-year, trading volume rose 35.9 percent in February. Daily average turnover in February fell to 0.99 billion euros from 1.1 billion in January.
Greece's borrowing costs have surged as markets worried about the country's soaring deficit, its debt load and its ability to rollover debt.
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Martinghoul - is this more scaremongering by ZH or does this have merit?
Greek trading system HDAT, which is run by the central bank, told primary dealers of Greek sovereign debt the move was a response to the scale of open short positions on such bonds, according to a copy of the HDAT document obtained by Reuters.
This week financial markets hammered Greek bonds and bank shares, driving the euro zone member's borrowing costs higher and pushing it closer to tapping a last-resort European Union-International Monetary Fund safety net.
"Due to massive debit position in HDAT transactions, the Committee of Primary Dealers Supervision and Control decided as of today and until further notice to automatically proceed to repo auctions, at the end of HDAT trading day, in order to cover all transactions with such debit positions," the statement obtained by Reuters said.
Traders said the decision meant that any uncovered short positions on Greek government bonds would have to be covered, regardless of the price, at the end of the settlement day in the repo auction.
This would make it more difficult to short Greek bonds but might end up affecting market makers more than others, according to some traders.
Year-over-year, trading volume rose 35.9 percent in February. Daily average turnover in February fell to 0.99 billion euros from 1.1 billion in January.
Greece's borrowing costs have surged as markets worried about the country's soaring deficit, its debt load and its ability to rollover debt.
More in link...