jfm
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Post by jfm on Aug 8, 2016 20:48:02 GMT
What to do if you are evil (/perhaps criminal?) and you are desperate to sell your loan part: 0) You already have the most discounted sale price (you are desperate to sell) - e.g. £1000 @ 99.5 1) You put a buy order for a similar amount but slightly higher - e.g. £1000 @ 99.6 2) You choose a popular time and sit there refreshing the page 3) Someone comes along, spots the arb and buys your £1000 @ 99.5 - they hope to make a quick £10 profit. 4) You see you've sold your loan part so you quickly cancel your buy at 99.6 Note that in practice the person in (3) may complain and request your account blocked! Alternatively, if they don't have the cash but are holding the loan, they sell to you first. Your move now?
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Neil_P2PBlog
P2P Blogger
Use @p2pblog to tag me :-)
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Post by Neil_P2PBlog on Aug 8, 2016 21:41:31 GMT
What to do if you are evil (/perhaps criminal?) and you are desperate to sell your loan part: 0) You already have the most discounted sale price (you are desperate to sell) - e.g. £1000 @ 99.5 1) You put a buy order for a similar amount but slightly higher - e.g. £1000 @ 99.6 2) You choose a popular time and sit there refreshing the page 3) Someone comes along, spots the arb and buys your £1000 @ 99.5 - they hope to make a quick £10 profit. 4) You see you've sold your loan part so you quickly cancel your buy at 99.6 Note that in practice the person in (3) may complain and request your account blocked! Alternatively, if they don't have the cash but are holding the loan, they sell to you first. Your move now? That is a risk! Only can think of more desperate solutions!
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jnm21
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Post by jnm21 on Aug 9, 2016 8:13:59 GMT
What to do if you are evil (/perhaps criminal?) and you are desperate to sell your loan part: 0) You already have the most discounted sale price (you are desperate to sell) - e.g. £1000 @ 99.5 1) You put a buy order for a similar amount but slightly higher - e.g. £1000 @ 99.6 2) You choose a popular time and sit there refreshing the page 3) Someone comes along, spots the arb and buys your £1000 @ 99.5 - they hope to make a quick £10 profit. 4) You see you've sold your loan part so you quickly cancel your buy at 99.6 Note that in practice the person in (3) may complain and request your account blocked! Alternatively, if they don't have the cash but are holding the loan, they sell to you first. Your move now? Reminds me of someone my dad knew seeing two snooker players both at better than evens to win the same match at different bookies - rushed to get cash, put half on one & then the second bookie refused their bet! Nervous wait, but the match did go their way, luckily!
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Investor
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Post by Investor on Aug 11, 2016 11:26:58 GMT
What to do if you are evil (/perhaps criminal?) and you are desperate to sell your loan part: 0) You already have the most discounted sale price (you are desperate to sell) - e.g. £1000 @ 99.51) You put a buy order for a similar amount but slightly higher - e.g. £1000 @ 99.62) You choose a popular time and sit there refreshing the page 3) Someone comes along, spots the arb and buys your £1000 @ 99.5 - they hope to make a quick £10 profit. 4) You see you've sold your loan part so you quickly cancel your buy at 99.6 Note that in practice the person in (3) may complain and request your account blocked! Often find that the problem with these devious, cunning criminal types is that they always get let down by planning their schemes during their maths lessons and not paying attention to learning the basics.
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jnm21
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Post by jnm21 on Aug 11, 2016 12:54:46 GMT
I knew I was meant to be somewhere - maths!  Only joking - I paid very good attention in class & let my mind wander when I should have been revising! |
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ali
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Post by ali on Aug 26, 2016 15:36:32 GMT
Does anyone know how SM bids affect your balance? The guide linked in the top post talks about the maximum possible accrued interest being deducted from the cash available. Is an allowance also made for discounts/premiums. To take my (huge) account as an example, is this right: Funds currently lent
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| 1,926.05 | | Cash |
| 124.73 | Bids on PM
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| 350.00
| Bids on SM
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| 600.00 |
| Discounts | -8.60 |
| 1 period interest
| 5.00 | | Balance |
| 2,997.18 |
TIA |
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Post by ablrateandy on Aug 26, 2016 23:14:00 GMT
Yes. It takes into accounts premiums (premia?) and discounts correctly |
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Post by onion12 on Feb 16, 2017 11:43:35 GMT
Can anyone confirm I am using sm and translating it properly ,
if I buy @ 99.900 that is discount or anything below 100% plus I am buying the interest that has been earnt for that month aswel
just trying to work out why account balance is less than I started with scratching head.
So at a guess it is becouse of the interest earnt all ready that I buy aswell
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elliotn
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Post by elliotn on Feb 16, 2017 13:01:06 GMT
I’ve been forced into Excel to calculate my interest earned and check my balance. If you buy 100 loan part at 99% ie 1% discount to par 100% you will have a balance of, say, 101 capital when you add on the discount paid by the seller to your Funds amount whilst any interest you bought will show up under Total Interest. Similarly, 100 bought at 101% will show as, say, 99 in your funds as you have paid a premium to the seller along with any MTD interest. You'll find something similar for FS SM purchases where you end up with balances that do not add up to your cash deposits and have to be reconciled manually. This month I look forward to reconciling amortisation payments too - a pain as I only use a simple cash app to record monthly interest earned but abl are worth it (especially if they introduce their promised Interest Bought filter in the next down time  ). |
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Post by onion12 on Feb 16, 2017 13:09:19 GMT
Can anyone confirm I am using sm and translating it properly , if I buy @ 99.900 that is discount or anything below 100% plus I am buying the interest that has been earnt for that month aswel just trying to work out why account balance is less than I started with scratching head. So at a guess it is becouse of the interest earnt all ready that I buy aswell Spot on. The fact that you're paying the seller's accrued interest to date is highlighted during the purchase process, but it can be a little confusing at first. You will receive the full month's interest with the loan's next repayment, assuming the borrower doesn't default and/or you haven't sold the investment beforehand. Discount=<100% Par=100% Premium=>100% Thank you MONEY it seems to be the same as fs would I also be correct that I would be liable for the tax on the interest that I buy
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elliotn
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Post by elliotn on Feb 16, 2017 17:06:53 GMT
Spot on. The fact that you're paying the seller's accrued interest to date is highlighted during the purchase process, but it can be a little confusing at first. You will receive the full month's interest with the loan's next repayment, assuming the borrower doesn't default and/or you haven't sold the investment beforehand. Discount=<100% Par=100% Premium=>100% Thank you MONEY it seems to be the same as fs would I also be correct that I would be liable for the tax on the interest that I buy Abl don't offer the tax advice but probably although most interest is paid monthly so the inherited liability is much smaller ie just the part of the month since last payment.
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james
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Post by james on Feb 18, 2017 12:57:13 GMT
would I also be correct that I would be liable for the tax on the interest that I buy Deduct the accrued interest you paid on purchases from the interest you receive. So you pay tax only on the interest for the time you hold the loan. The seller adds the accrued interest from you to their own taxable income. This is because the advice Ablrate have received is that the loans are securities covered by the Accrued Income Scheme.
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Post by onion12 on Feb 18, 2017 14:59:08 GMT
would I also be correct that I would be liable for the tax on the interest that I buy Deduct the accrued interest you paid on purchases from the interest you receive. So you pay tax only on the interest for the time you hold the loan. The seller adds the accrued interest from you to their own taxable income. This is because the advice Ablrate have received is that the loans are securities covered by the Accrued Income Scheme. Thanks James for clearing that up I did get a little bit slightly under par when the new loan was wanting funds but it's all @ premium now when next loan comes I'll have a better stab at it
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stevio
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Post by stevio on Feb 18, 2017 21:24:28 GMT
Nope. I sometimes do but not all of the time. I'll start putting it on the termsheet regularly. I noticed I haven't seen AER on the recent loans ablrate
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stevio
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Post by stevio on Feb 19, 2017 17:44:10 GMT
I noticed I haven't seen AER on the recent loans ablrate Where's the termsheet found? The only place I've seen it is when bidding:  Termsheet = new loan details (as far as I understand)
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Only joking - I paid very good attention in class & let my mind wander when I should have been revising!
).
