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709
Apr 26, 2018 18:18:58 GMT
Post by chris on Apr 26, 2018 18:18:58 GMT
As there has been a question sent to the help desk on this I thought it worth clarifying for all here. This change to the allocation algorithm wouldn't affect the amount each account seeks to buy in a loan, only how the available supply of loan parts is distributed when there is more demand than supply. If lender a wanted £100 in their MLA and lender b wanted £100 in their MLA and another £75 in their GBBA, then were a third lender to sell £500 in that loan then all demand would be satisfied. Lender A would have £100 in their MLA, lender B would have £100 in their MLA and £75 in their GBBA, and £225 would remain for sale on the aftermarket.
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misscas
Member of DD Central
Posts: 64
Likes: 55
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709
Apr 26, 2018 18:48:47 GMT
Post by misscas on Apr 26, 2018 18:48:47 GMT
How often do the allocation wheels turn these days? I forgot to bid this on this loan but made a buy order this morning in MLA (IFISA) for £500. There was and still is ample availability so I was a bit surprised when I logged in a few minutes ago to see my holding is still zero. QAA and 30DayAA both have £31 but I am assuming this does not affect MLA allocation given the amount showing as available for investment.
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niceguy37
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709
Apr 26, 2018 20:01:44 GMT
Post by niceguy37 on Apr 26, 2018 20:01:44 GMT
puddleduck - I think you're misunderstanding. The investment accounts ignore your MLA as they have no idea how to interpret what your intention is. They look after themselves in isolation and your MLA operates solely on your buy / sell instructions. If a new loan is launched and your GBBA decides to invest £100 and you place a £100 buy order in the MLA then the system will process each individually. So if the maximum allocation per lender account is £90 then in that scenario you would end up with £90 in your GBBA and £90 in your MLA due to investing via accounts, conceivably ending up with £180 vs £90 for someone investing only via the MLA. That's not very fair and would cause issues with some features we're looking to add later in the year such as bespoke investment accounts where you could create multiple copies of an account to game the system. So we'll be switching to a strict per lender account allocation with the next update to the marketplace. In the above scenario where each lender is allocated £90 if you invested only via the MLA you would get £90, whereas if the GBBA wanted to invest as well (and it will continue to ignore any MLA instructions) then you would get £45 in the GBBA and £45 in the MLA. That is fairer for all lenders and prevents the gaming of the system in that way. I think this will be a problem for me. For example I've £10K in MLA and £10K in GBBA2. In my GBBA I expect an even spread of loans across all eligible loans. Then I hand-pick some loans for the MLA based on my interpretation on the quality of their security. IIUC this is the current situation. Now when your new algorithm comes along, my MLA purchasing of preferred loans will be reduced, and my GBBA will also buy less of these loans because of my holdings in the MLA. So my GBBA will be left with a disproportionate amount of the less-desired loans. I could live with slower MLA purchases but will not be happy about the unbalanced GGBA loan portfolio. I regard my MLA and my GBBA as two separate investments, and expect them to invest independently. I appreciate that you don't want people gaming the system, but if you allow lenders multiple accounts of each type then it's at that point that it would be best to set out loan purchase portions. i.e. If a lender opens 3 MLA's for example, then add them together when apportioning him/her some of an in-demand loan.
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709
Apr 26, 2018 21:23:25 GMT
Post by chris on Apr 26, 2018 21:23:25 GMT
niceguy37 - there's another factor at play which is the diversification algorithm in the GBBA, so if you are underinvested proportionately then your holdings will be rebalanced with others to bring it roughly into line.
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misscas
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Posts: 64
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709
Apr 27, 2018 10:52:09 GMT
Post by misscas on Apr 27, 2018 10:52:09 GMT
How often do the allocation wheels turn these days? I forgot to bid this on this loan but made a buy order this morning in MLA (IFISA) for £500. There was and still is ample availability so I was a bit surprised when I logged in a few minutes ago to see my holding is still zero. QAA and 30DayAA both have £31 but I am assuming this does not affect MLA allocation given the amount showing as available for investment. To answer my own question - it can take 3-4 days! I gather the system is constantly churning striving to be fair to everyone but is much slower than it used to be due to numbers of lenders and buy requests. I've just spoken to the help desk and was advised to monitor over the weekend. If nothing allocated by Monday and availability still showing to contact them again. Note to self: remember to do buy instruction before loan draws down.
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rick24
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709
Apr 27, 2018 11:24:05 GMT
Post by rick24 on Apr 27, 2018 11:24:05 GMT
Not sure I have understood correctly, but I would be in favour of a system in which my holding of a loan in QAA was reduced when I invested in the same loan through MLA (subject to the above provisos about availability) to give the same total holding. This will help me to avoid unwanted overexposure to loans that I hold in both.
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