Loans available at a discount (AC)

I'm also about to start doing this (as of the end of tomorrow when SimplyI will return my cash).

My feeling is that if it's not 7.5% or above then it's stagnant and so not worth touching. I'd be interested to know how long your selling time is when 7% or below.

If you buy at 1% and then you have to sell at 0% along with everyone else. There could be lots and lots of other 0% sellers, so I agree with you that buying at >1% makes sense. However, that rules out a lot of loans if, like me, you like the base rate to be 7.5% or more.

I guess it depends on what rate of return you are seeing from your strategy. I think that this strategy should, if working well, get more than 9% a year, and if you are already getting more than that then it's really not worth buying and holding.

Absolutely. 0.5% gain in a week is worth a lot more than 1% gain in two weeks as the latter might get stuck and then you can be looking at months for your 1% gain. Anyway, 0.5% in a week is way over 26% a year, that's worth shooting for.

All very interesting, thanks. I have one more variable, and it's more of a question than anything else. What do you think of loan time remaining? If you believed that the loan will redeem on time or ahead of time, then a discount is worth massively more when there is only a few months to go. For example, a 1% discount with only 3 months to go could, in theory, be recycled four times over the year, so 4% a year. I'm not sure the market sees this though, maybe as it's not throught through, or maybe because a loan is seen as almost risk free before the very end, so it's best to get out whist you can still get your money back.

Oh, and one more thought - the amount already in the market is a very good indicator as to whether it will sell. Buying stuff at discount when you can almost exhaust the supply gives you a good chance of selling again quickly. The AA algorithms can get hold of a loan and eat it up fast, but I've no idea when they decide to do this.

I've been exploiting this feature for some time -it arises because the automated accounts buy without regard to discount. The algorithm buys equal quantities from each seller, so it's just a question of determining which loan(s) are being bought, for example #768 has been selling for several weeks now and I've been buying to top up and selling straight away. It isn't megabucks though - sales are just a trickle. And clearly I don't want too many people doing the same thing so why am I posting? Duh

Yes it does exactly. I had £160 for sale at the time which will most likely not be the same as you had, so proving that the amount offered is not relevant (as bg notes earlier in the thread)

There's two massive loans about to come on the market today, one is a refinance so all that cash will become available to buy discounts.