SteveT
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Post by SteveT on Jun 12, 2020 10:21:11 GMT
I strongly suspect people are over-thinking this. AC's secondary market trading system for MLA loans is one of the best in the P2P sector, so why would they opt to change a tried and tested model? I fully expect the SM for Access Accounts to mirror the MLA approach:
- Those wishing to sell place an offer to sell a specific £ sum at a chosen level of discount (in 0.5% steps). Likely only 1 offer at a time per account.
- Those wishing to buy place an order to buy a specific £ sum at a minimum level of discount (in 0.5% steps). Likely only 1 order at a time per account.
- A summary of current market availability at each discount step available for all to see
- Ability to amend / cancel an existing offer / order at will.
The only indicated departure from the MLA system I've seen suggested so far is that multiple sell offers at the same level of discount may be dealt with by the system on a FIFO basis, rather than (as with the MLA now) on a randomised basis. Presumably any amended offers would then have to go to the back of the FIFO queue at that discount step (even if just the offered £ sum was reduced?). However, I don't really see the need for / benefit of this versus the MLA system, so it could very well not happen. I imagine that multiple buy orders at the same level of discount will see new availability shared around evenly, as with the MLA now.
One thing I'm unsure of is whether offers to sell a (notice period expired) 90DAA holding will be treated as part of same market as 30DAA / QAA offers, in which case buyers presumably will be buying only into their QAA accounts. This strikes me as simplest, given the rapidly reducing difference between the account interest rates. Over the coming months, I suspect the 3 accounts may be merged in any case (and probably renamed!)
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iRobot
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Post by iRobot on Jun 12, 2020 10:33:36 GMT
I strongly suspect people are over-thinking this. <snip> Thanks for the insight SteveT . Personally, I've no experience of MLA - neither primary nor secondary markets - and have only had AA holdings with AC. I suspect others may be in the same boat. Can't imagine AC would go to the trouble of deviating too far from their existing SM functionality and ending up with two quite distinct sets of code base to support (and troubleshoot, in the case of the newer set of code, were one to be implemented). Caveat to that would be if - as per the web platform - AC were looking to migrate the SM functionality and were using the AA SM as the 'pilot' for that migration. (And here ends my contribution to the speculation on this thread  )
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SteveT
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Post by SteveT on Jun 12, 2020 10:42:20 GMT
Caveat to that would be if - as per the web platform - AC were looking to migrate the SM functionality and were using the AA SM as the 'pilot' for that migration. (And here ends my contribution to the speculation on this thread ) Most unlikely, I feel, especially since AC have just completely rebuilt their lender UI whilst replicating exactly the current SM functionality
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rscal
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Post by rscal on Jun 12, 2020 11:34:37 GMT
I strongly suspect people are over-thinking this. AC's secondary market trading system for MLA loans is one of the best in the P2P sector, so why would they opt to change a tried and tested model? I fully expect the SM for Access Accounts to mirror the MLA approach: - Those wishing to sell place an offer to sell a specific £ sum at a chosen level of discount (in 0.5% steps). Likely only 1 offer at a time per account. - Those wishing to buy place an order to buy a specific £ sum at a minimum level of discount (in 0.5% steps). Likely only 1 order at a time per account. - A summary of current market availability at each discount step available for all to see - Ability to amend / cancel an existing offer / order at will. The only indicated departure from the MLA system I've seen suggested so far is that multiple sell offers at the same level of discount may be dealt with by the system on a FIFO basis, rather than (as with the MLA now) on a randomised basis. Presumably any amended offers would then have to go to the back of the FIFO queue at that discount step (even if just the offered £ sum was reduced?). However, I don't really see the need for / benefit of this versus the MLA system, so it could very well not happen. I imagine that multiple buy orders at the same level of discount will see new availability shared around evenly, as with the MLA now.
One thing I'm unsure of is whether offers to sell a (notice period expired) 90DAA holding will be treated as part of same market as 30DAA / QAA offers, in which case buyers presumably will be buying only into their QAA accounts. This strikes me as simplest, given the rapidly reducing difference between the account interest rates. Over the coming months, I suspect the 3 accounts may be merged in any case (and probably renamed!) Good points: given the way funds are currently being released asa trickle why would sellers not also have the expectation of a trickle on their offers to sell. Which is what would happen on any split basis of buying as per current MLA
Agreed
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dead-money
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Post by dead-money on Jun 12, 2020 11:36:39 GMT
Imagine Seller A has discounted at 10% and seller B has discounted at 5%. Buyer X Buys all discounted parts at 10% and re-lists them at a discounted 7%. Seller B stays stuck at the same position in the queue and has to compete. I think 10% discounts are unlikely, but we will have to see what we end up with.
Hmm, well I've priced the Access accounts at 20%+ discount, once you account for all the defaults of negilible worth it holds onto to save AC writing them off and using the provision funds.
So if the markets transparent that's where my starting bid will be.
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dead-money
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Post by dead-money on Jun 12, 2020 11:39:55 GMT
Yes, In principle arbitrage is fine but the issue of fairness and the use of bots was a serious issue for FC before the black box. FC was infested with bots, and they allowed FC to present the black box as fairer and a response to complaints! As just a seller of part of my Access account it would not worry me - just as arbitrage has helped me to sell my small MLA. But those buying will wish to see fair access for manual purchasers, and Assetz would get some stick for allowing bots - they can't win. However, this is supposed to be a temporary SM, which could be shut down if no longer needed.
I don't believe the AA SM will be temporary, once it's in place wheres the driver for removing it?
If everyone can offer at par and exit then it still works with buyers willing to bid at par to enter.
Plenty of other markets operate with variable discounts and premiums to NAV. i.e. Investment Trust shares
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jun 12, 2020 11:43:21 GMT
Yes, In principle arbitrage is fine but the issue of fairness and the use of bots was a serious issue for FC before the black box. FC was infested with bots, and they allowed FC to present the black box as fairer and a response to complaints! As just a seller of part of my Access account it would not worry me - just as arbitrage has helped me to sell my small MLA. But those buying will wish to see fair access for manual purchasers, and Assetz would get some stick for allowing bots - they can't win. However, this is supposed to be a temporary SM, which could be shut down if no longer needed. Perhaps all units sold on the AA secondary market should have to be reinvested in either the 30 day or 90 day accounts. That would stop a frenzy of flippers.
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SteveT
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Post by SteveT on Jun 12, 2020 11:47:21 GMT
Perhaps all units sold on the AA secondary market should have to be reinvested in either the 30 day or 90 day accounts. That would stop a frenzy of flippers.
Surely a "frenzy of flippers" is exactly what all those clamouring to get their money out quickly ought to have their fingers crossed for!! A lifeless market is of no use to anyone.
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dead-money
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Post by dead-money on Jun 12, 2020 12:20:50 GMT
Surely a "frenzy of flippers" is exactly what all those clamouring to get their money out quickly ought to have their fingers crossed for!! A lifeless market is of no use to anyone. Yes, any constraints on resale of units brought would have to be priced in, i.e. deeper discount offered.
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blender
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Post by blender on Jun 12, 2020 14:18:20 GMT
I never said that, two posts above. That was sqh. I yearn for some of my account to provide a feeding frenzy for flippers. Come and get it!
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ceejay
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Post by ceejay on Jun 12, 2020 18:38:19 GMT
I never said that, two posts above. That was sqh. I yearn for some of my account to provide a feeding frenzy for flippers. Come and get it! No problem. Once the market opens up just offer us 25% and watch those (us) piranhas fly!
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rscal
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Post by rscal on Jun 12, 2020 18:53:28 GMT
I never said that, two posts above. That was sqh. I yearn for some of my account to provide a feeding frenzy for flippers. Come and get it! No problem. Once the market opens up just offer us 25% and watch those (us) piranhas fly! With OPM? Or OPOPM?? 
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Post by davee39 on Jun 12, 2020 19:42:41 GMT
The quick access account is supposed to be --- quick.
Why would anyone put in fresh money if they had to discount to get out and normal access times had not been restored?
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Post by honda2ner on Jun 12, 2020 22:39:14 GMT
The quick access account is supposed to be --- quick. Why would anyone put in fresh money if they had to discount to get out and normal access times had not been restored? Because when you have zero invested in access accounts it's a sensible diversification. Why would I discount to get out? I haven't discounted to get out of the MLA, yet I've still managed to pull over 10% of my holdings at par in 2 weeks during April, right in the worst of the storm. I'm getting really bored of saying this but these are high risk, high return investments and NOT a savings account so what's wrong with holding it until maturity? Did you really think that you could get 3-4 times more interest than a savings account without any catches? I'm quite happy to lose 10% if I can buy in at a 20% discount. If I wanted to get out I wouldn't have put my money in P2P. I will be flipping any AA holdings back up for sale but that's only because I see a better risk/return in bonds or the MLA, covid hasn't changed that one bit.
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Post by captainconfident on Jun 13, 2020 22:07:02 GMT
A load of people panic sold the MLA in March April at 15 - 20%, stuff that sells near par these days. I doubt anyone is going to sell the AA for those rates now. My calculation, which may be completely wrong, is that these are loans of generally reasonable quality and this platform will always make a positive return on a diversified portfolio. Give it time.
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