SteveT
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Post by SteveT on Mar 6, 2015 12:46:45 GMT
I have a theory that auctions are most likely to "Early Close" towards the end of an afternoon (borrowers keen to take the money before they leave for the day?) and/or on Fridays (same logic but for the weekend?). Certainly that's been my experience since I started trawling systematically for them a couple of weeks ago (8 landed so far, although only 1 that'd I describe as a "whopper" in terms of rate). Has anyone got better data or a track record over a longer period? Any other useful tips when and how it's best to go fishing for the elusive Early Closers?
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Post by goldservice on Mar 6, 2015 13:25:12 GMT
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SteveT
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Post by SteveT on Mar 6, 2015 14:06:06 GMT
Thanks, very interesting.
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Post by GSV3MIaC on Mar 6, 2015 16:23:10 GMT
In my experience (ah, but should I tell you..) if they are going to early close it's normally quite soon (a few hours at most) after becoming fully funded, OR within a few hours of the planned close. Recently though there have been several which closed and then re-opened, or closed early, sat for 2 weeks, and never turned into a loan. And there are always exceptions (some have closed early, AND turned into loan parts, well out of hours, even in the middle of the weekend).
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fasty
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Post by fasty on Mar 6, 2015 16:30:13 GMT
I'd be very interested to see the extent of correlation between early closures and defaults. I've always been concerned that early closure might have Frightening Consequences.
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Post by goldservice on Mar 6, 2015 16:30:29 GMT
Some early closers seem to be just after a threshold average rate has been reached eg a round number such as 10%.
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Post by bracknellboy on Mar 6, 2015 18:37:42 GMT
I'd be very interested to see the extent of correlation between early closures and defaults. I've always been concerned that early closure might have Frightening Consequences. It would be interesting to see but when I was more active on FC I was generally pretty relaxed about these. Although perhaps more so when auction durations were a standard 15 rather than 7 days. Reasons to close early: - You're a business that has a very good use for the money; the extra 1 or 2% on the average rate you might save in total 'pay back' terms (capital and interest) is small fry compared with the roi you expect to acheive by deploying the capital and you can start that investment now. So why hang around ? - You have a genuniely time limited opportunity (e.g. opp. to acquire stock at a knockdown price) - You don't know how FC works and don't realise that the auction will run on, or don't know that bids can't be subsequently withdrawn - You've completely run out of cash and will be trading insolvent unless you get fresh money asap to keep the lights on Reasons to leave to end time: - You're a business that has a very good use for the monety; the extra 1 or 2% doesn't really matter, but you don't actually need the money asap so might as well let it run to end - You have a time limited opportunity but your end stop is sufficiently far out - You've very nearly run out of cash, but have enough to keep you going for the duration of auction run, and that extra 1 or 2% of interest you might save could just be the margin that keeps you going long enough to recover. I stopped trying to read the tea leaves .....
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Post by GSV3MIaC on Mar 6, 2015 19:46:32 GMT
You rarely get a drop of anything like 2% between auction fully filled and the normal close, unless 'fully filled' has been warped by a lot of 15% bids from YKW. The drop is more usually well under 1%, which is (monthly) peanuts over a year or two on £50k.
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spyrogyra
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Post by spyrogyra on Mar 7, 2015 9:16:55 GMT
A few months ago I happened to meet an FC borrowers over a pint. ;=They had taken the loan not long ago and in the course of the conversation it transpired they closed early. The interesting bit of info was that their adviser (not FC), had RANG them to say the auction is 100% filled and advised that the interest could drop an insignificant 0.5-1% and that the borrower can end the auction and receive the funds immediately.
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Post by Deleted on Mar 11, 2015 10:14:07 GMT
I've been monitoring (and graphing) the maximum % figure in the last 20 auctions by A and A+ for the last couple of weeks and these figures are falling through the floor. I suggest the days of catching great percentages are now long gone at FC.  |
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blender
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Post by blender on Mar 11, 2015 10:42:33 GMT
True Bobo, but FC has times to sell and times to buy. This is a time to sell, to dispose of low rate property loans bought with a cash back and high rate business loans which look risky and have been held for, say 6 months. Of course FC may have reached a stable position now, but in the past, times to buy have always returned. You have to go with the tides, you cannot control them - or just be an Autobidder of course.
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Post by Deleted on Mar 11, 2015 13:56:39 GMT
Thanks Blender, I'll keep monitoring.
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Post by goldservice on Mar 11, 2015 15:38:12 GMT
True Bobo, but FC has times to sell and times to buy. This is a time to sell, to dispose of low rate property loans bought with a cash back and high rate business loans which look risky and have been held for, say 6 months. Of course FC may have reached a stable position now, but in the past, times to buy have always returned. You have to go with the tides, you cannot control them - or just be an Autobidder of course. Well, I've been doing the selling bit and now have a pile of money sitting doing not very much. While waiting for the good times to return, what should I do? I've looked at other sites but am not attracted to them. Shall I just park my money in the best loans that can be achieved (ie the larger loans), buy only in small parts (say, £20) and thus be liquid if the good times ever return? That way, at least I'll be doing better than on RS, and will be more liquid as well.
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Post by GSV3MIaC on Mar 11, 2015 16:35:09 GMT
I'd either leave the money idle, or park it in RS's one month pot. The danger(s) of 'buying the best currently available' are that you will probably get under diversified (there are not many to choose from) and, if things do pick up, today's 'good rates' may look like next month's rubbish rates.
I guess if you sell out as soon as the market appears to be moving up (watch it every day?) &/or expect to unload onto autobuyers (taking a 0.25% hit, and hoping Flaming Casseroles don't 'fix' autobid so people can avoid the secondary market) you might get away with it. Or if you have a couple of spare £M I suppose you can join the Whole Loans frenzy, although the rates there should be headed down soon as well.
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blender
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Post by blender on Mar 11, 2015 17:59:56 GMT
True Bobo, but FC has times to sell and times to buy. This is a time to sell, to dispose of low rate property loans bought with a cash back and high rate business loans which look risky and have been held for, say 6 months. Of course FC may have reached a stable position now, but in the past, times to buy have always returned. You have to go with the tides, you cannot control them - or just be an Autobidder of course. Well, I've been doing the selling bit and now have a pile of money sitting doing not very much. While waiting for the good times to return, what should I do? I've looked at other sites but am not attracted to them. Shall I just park my money in the best loans that can be achieved (ie the larger loans), buy only in small parts (say, £20) and thus be liquid if the good times ever return? That way, at least I'll be doing better than on RS, and will be more liquid as well. Sorry I cannot answer that but there is a general thread on this board which tries to. The idea is to park it at the best rate you can get which is both safe and sufficiently liquid. All FC loans are pretty safe up to the second repayment, and interest only property loans for longer. I am hoping for a nice 12% B interest only short term finance loan with a first charge and where FC has all the interest in the bank. Cash back would be a nice bonus.
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