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Post by Financial Thing on Jun 30, 2015 23:14:20 GMT
As some of you know, some P2P website loans are filling in a matter of minutes. This led me to ponder autobids.
Anyone have an idea as to how a websites auto-bidding system would prioritize an order as to who's money is placed first? From a programming standpoint, this would be a pretty complicated algorithm that would create a ticket system, similar to a "Take a Number" to where once a person received a piece of a loan on auto-bid, they would jump to to the back of the queue for the next loan.
For example on Minto's, it is relatively tricky to be find AA or A rated loans (unless you go to the Secondary Market) as they fil quickly. Even the website states "most loans are purchased via auto-bid").
Anyone have any insight?
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james
Posts: 2,205
Likes: 955
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Post by james on Jul 1, 2015 10:04:17 GMT
Various methods can be used, including:
1. Queue with cap on amount that can be offered in each bid and on how many bids can be placed by each person. Bondora has used this. If loans of differing quality are available one queue for each grade/term is needed or this system will deny those who will accept lower grades the more desirable ones. Their queue positions end up being used by the least desired so they are almost always near the back for the desirable ones.
2. Allocating somehow between everyone who wants part of the loan.
It's very hard to get allocations "right" and "fair" for al meanings of the words.
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Post by wiseclerk on Jul 1, 2015 19:34:20 GMT
As some of you know, some P2P website loans are filling in a matter of minutes. This led me to ponder autobids. Anyone have an idea as to how a websites auto-bidding system would prioritize an order as to who's money is placed first? From a programming standpoint, this would be a pretty complicated algorithm that would create a ticket system, similar to a "Take a Number" to where once a person received a piece of a loan on auto-bid, they would jump to to the back of the queue for the next loan. For example on Minto's, it is relatively tricky to be find AA or A rated loans (unless you go to the Secondary Market) as they fil quickly. Even the website states "most loans are purchased via auto-bid"). Anyone have any insight? Actually Mintos has a pretty unusual system as it fills the loan with partial autobids. Example Investor A has 100 Euro autobid Investor B has 400 Euro autobid Investor C has 500 Euro autobid A new 200 Euro loan comes in that matches autobids of A, B and C. There are no other autobids of other investors matching this new loan in this case A will succeed with 20 Euro, B with 80 Euro and C with 100 Euro => 200 Euro (100%) funded Other platforms use queing mechanism - which can again be very different by the parameters taken into account. If different interest rates are allowed/used (auction or no auction) then autobids with lower interest rate could have precedence. Lots of possibilities. For some platforms there have been long discussion threads that first determined to understand how it actually does work, and after that was established, what the strategies for investors are to deal with it
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Post by Financial Thing on Jul 3, 2015 2:26:33 GMT
thanks for your insight into this subject shrouded in mystery  |
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Post by jevans4949 on Jul 3, 2015 6:09:36 GMT
Another factor: some platforms have units of a fixed size, e.g., £10, others have units with no fixed size (except perhaps whole pence). The former will probably have a queueing model, the latter a sharing model. Assetz are in the latter category, and have explained the model on their board on this forum. Zopa have a queueing model, based on how much spare cash lenders have, and how long it's been lying around, although last time I was investing there, exactly how it worked was a bit of a mystery.
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Post by martins on Jul 29, 2015 4:58:18 GMT
We actually cap the autobid at max = loan size. So in your example autobids would be adjusted down for B and C to 200. The loan would be then funded with A getting 40 Euro, B getting 80 Euro, and C getting 80 Euro too. As some of you know, some P2P website loans are filling in a matter of minutes. This led me to ponder autobids. Anyone have an idea as to how a websites auto-bidding system would prioritize an order as to who's money is placed first? From a programming standpoint, this would be a pretty complicated algorithm that would create a ticket system, similar to a "Take a Number" to where once a person received a piece of a loan on auto-bid, they would jump to to the back of the queue for the next loan. For example on Minto's, it is relatively tricky to be find AA or A rated loans (unless you go to the Secondary Market) as they fil quickly. Even the website states "most loans are purchased via auto-bid"). Anyone have any insight? Actually Mintos has a pretty unusual system as it fills the loan with partial autobids. Example Investor A has 100 Euro autobid Investor B has 400 Euro autobid Investor C has 500 Euro autobid A new 200 Euro loan comes in that matches autobids of A, B and C. There are no other autobids of other investors matching this new loan in this case A will succeed with 20 Euro, B with 80 Euro and C with 100 Euro => 200 Euro (100%) funded Other platforms use queing mechanism - which can again be very different by the parameters taken into account. If different interest rates are allowed/used (auction or no auction) then autobids with lower interest rate could have precedence. Lots of possibilities. For some platforms there have been long discussion threads that first determined to understand how it actually does work, and after that was established, what the strategies for investors are to deal with it |
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