Photographer: Cesar Rodriguez/Bloomberg

Welcome to the Great Unraveling of the Global Convergence Trade

Traders ponder a new era for globalization post-Trump.

What's old is new again.

Market participants seeking a framework in which to play the unexpected election of Donald Trump as U.S. president would do worse than to reach into the archives, all the way back to the early 2000s, when investors sought to profit from the expansion of the European Union. Fueled by a vision of a borderless Europe with a shared currency, strengthened trade and heightened economic growth, hedge funds and other traders laid on bets that would benefit from the region's growing political-economic ties in the form of a "convergence trade."

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