For investors who are in the market and nervous, but don't want to close their positions
, the cost of portfolio protection is relatively low.
"Japan's big event finished yesterday, so the fiscal cliff news became a catalyst for traders to close their positions
and sell the dollar before the Christmas holidays," said Yuji Saito, director of foreign exchange at Credit Agricole Corporate & Investment Bank in Tokyo.
Shortsellers who rushed to close their positions
after Porsche's announcement on Sunday were paying virtually any price to get their hands on the few remaining shares, even though Porsche insisted its announcement would allow short sellers to unwind their positions "without haste and without greater risk." There was wide speculation about which investment companies had been caught out by the short squeeze, and many banking shares fell as a result.
''Investors who had felt safe buying bonds are now selling to close their positions
for now,'' said a trader at a foreign brokerage.