Property parts on the SM (at Par)

I'm probably being a bit slow on the uptake but reading this thread it seems that everyone is saying that autobid will match SM loan parts with 0% premium in preference to those with a minus premium (ie a discount). Is this right?

The optimality (or not!) of autobid seems to me highly dependent on the rate you set.

For those who are using autobid in a near-optimal manner, this issue won't matter, as no loan parts at a near-optimal rate will be offered at a discount anyway.

We're going to have to agree to disagree about whether there IS any 'optimal manner' for using autobid .. i.e. where it won't buy dented parts (just because they are high rate and sold at par), where it won't invest 0.5% or 1% of your fund in a single, possibly not very liquid, loan part, and where it'll actually bid on everything you'd like it to bid on before the auction closes (we won't even get into the issue of the rate it bids at .. I assume for 'optimal' you mean to set it at a really high rate, and put up with the fact that sometimes you could have got more, and sometimes you'll drop out when you might have been willing to go lower). Oh and it won't do 'spread betting' either.

We are repeating old discussions so I will repeat that the secondary market is there principally to give liquidity for those wishing to sell before term. Autobid works with Autosale to do that at par. So an idea that Autobid is there solely for the buyer and needs to be optimised for the buyer is taking too narrow a view of its purpose. The problem with the property loans lies with the overuse of a cash back promotion - not with Autobid. If property loans had a good interest rate, or if Autobid would buy larger parts in secured A+ loans, there would be no problem. Autobid is not so bad a facility - it seems to be used as a scape-goat here, quite literally. If you feel guilty about selling property loan parts at par - don't list them.

That's the problem - you need not feel bad about anything. People who use Autobid are generally those who have not the time or have not the skill to pick their loan parts, or of course are simply happy with what Autobid produces, which is a lot better than savings. But it is a tool which gives statistically determined results and is judged by its users by how it performs overall against expectations. That performance is managed by FC and it is their responsibility, in setting the trading rules and in other ways, to ensure that the Autobid users get an acceptable return. The major intervention is in setting MBR on the PM.
You are worrying about individual loans parts purchased being sub-optimal, when Autobid users have no interest in the individual purchases, and even less in the identity and motivations of the sellers of individual loan parts. The only person who feels bad about this process is the seller of a property loan part which he knows to be a sub-optimal purchase. But you could look at it another way and be pleased that the Autobid purchaser, who may well hold to term, has a part with the best security on the platform. Loans which come back from late are a far more risky purchase imo, but ok within a diversified Autobid portfolio.

PS Nice post in another place, GSV.

I guess the fact that you can't know what 'optimal' is except by discovering what it isn't (by which time it is too late) sort of spoils the concept for me.
I'd like an option (as we all know coz I've said it before) to tell autobid to 'buy into this loan at the best possible rate, but not below x.x%'.