j
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Penguins are very misunderstood!
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Post by j on Mar 29, 2014 18:50:32 GMT
Diversification will come with the next phase, but for this one if you transferred in £3k then it would do some balancing across the various loans you wish to invest in - trying to keep your investments in each broadly equal but dependent on your settings. Well, I don't envy you trying to sort all that out! 
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Post by oldnick on Mar 29, 2014 19:22:45 GMT
How about a rule that you can only buy a maximum of 50% of the loan parts available from each loan per 'turn'. So you can fill your boots with the bridging loans that the underwriters are offloading, but not scoop up all the smaller loan parts in one go?
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Post by chris on Mar 29, 2014 21:28:24 GMT
How about a rule that you can only buy a maximum of 50% of the loan parts available from each loan per 'turn'. So you can fill your boots with the bridging loans that the underwriters are offloading, but not scoop up all the smaller loan parts in one go? Only works if all the loan units are offloaded in one go, depending on your definition of a turn. If it's piecemeal throughout the day then you'd keep hitting the front bidder in the queue. But a time based queue where each lender is iterated through in turn is another (more complicated code wise) option.
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mikes1531
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Post by mikes1531 on Mar 29, 2014 21:57:46 GMT
How about a rule that you can only buy a maximum of 50% of the loan parts available from each loan per 'turn'. So you can fill your boots with the bridging loans that the underwriters are offloading, but not scoop up all the smaller loan parts in one go? Only works if all the loan units are offloaded in one go, depending on your definition of a turn. If it's piecemeal throughout the day then you'd keep hitting the front bidder in the queue. But a time based queue where each lender is iterated through in turn is another (more complicated code wise) option. I think that it would be appropriate to limit how much time a lender could spend at the front of the queue. If a lender gets to the front of the queue and there's a part available that meets their criteria then they get it -- and are sent to the back of the queue. If there are lots of parts of a given loan available then the queue would circulate, allocating parts until either supply or demand ran out. If just a few parts come onto the market, then they'd go to the first lenders in the queue that want them, a bit to each lender. If there still are parts left when the end of the queue is reached, the queue would circulate, again until either supply or demand ran out.
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Post by chris on Mar 29, 2014 21:59:25 GMT
Should it be time based or value of loan parts bought, as if it's time based then what happens if no one sells any for a while but then there's a flood and the guy who bid first is now at the back of the queue?
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mikes1531
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Post by mikes1531 on Mar 29, 2014 22:17:19 GMT
Should it be time based or value of loan parts bought, as if it's time based then what happens if no one sells any for a while but then there's a flood and the guy who bid first is now at the back of the queue? If it's a case of the queue circulating as and when parts are available -- and being static when there's nothing available -- then perhaps time might have nothing to do with it. If, in the example above, the guy at the back of the queue is there because he's the last lender to have picked up a part -- no matter how long ago -- then I see no reason to allow him to jump the queue. He ought to have to wait patiently until he's moved up to the front of the queue again -- or there's a part on offer that nobody in the queue ahead of him wants. But no doubt there's a situation I haven't considered where a different treatment would be considered fairer. 
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Post by chris on Mar 29, 2014 22:31:12 GMT
Yeah, wish this one were simple but there are so many edge cases and scenarios that everything seems flawed in some way. Perhaps a blended random score based on time in queue and total each lender has invested in that loan, giving a reasonably heavily weighted random ordering for each individual loan unit as its sold?
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mikes1531
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Post by mikes1531 on Mar 29, 2014 23:01:20 GMT
Yeah, wish this one were simple but there are so many edge cases and scenarios that everything seems flawed in some way. Perhaps a blended random score based on time in queue and total each lender has invested in that loan, giving a reasonably heavily weighted random ordering for each individual loan unit as its sold? I don't envy you. But I do agree with a comment made earlier -- Random is going to strike a lot of people as arbitrary, and that is likely to cause unhappiness. I expect most people would rather know what the rules are and take their chances in a queue than have to wait in the dark and hope lightning strikes. But that's JMHO. If you're familiar with Zopa's method of assigning new loans to lenders with funds on offer, you'll know how much discussion has been generated on their forum by the method they use and their failure to explain how it works to lenders' satisfaction. Please don't go there!
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Post by chris on Mar 29, 2014 23:03:21 GMT
I'll always be open and explain unless there's a competitive reason not to do so (super secret sauce and the like).
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Post by Ton ⓉⓞⓃ on Mar 29, 2014 23:56:23 GMT
I'll always be open and explain unless there's a competitive reason not to do so (super secret sauce and the like). New Money v Old Money priority, Algorithms, queues to lend, that does sound familiar somehow I just can't remember for the moment where I came across that before...
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mikes1531
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Post by mikes1531 on Mar 30, 2014 3:01:51 GMT
I'll always be open and explain unless there's a competitive reason not to do so (super secret sauce and the like). New Money v Old Money priority, Algorithms, queues to lend, that does sound familiar somehow I just can't remember for the moment where I came across that before... Selective memory -- one small benefit (?) of advancing age! 
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Mar 30, 2014 9:01:13 GMT
Should it be time based or value of loan parts bought, as if it's time based then what happens if no one sells any for a while but then there's a flood and the guy who bid first is now at the back of the queue? I think it has to be time based rather than random. An example, if X bid £1k. £1k of units came up for sale. X can be given say £200-£300 worth of units only & the rest divided equally amongst other eligible bidders in queue. That way, you've given a bit extra for the guy in front for his troubles of being first to press the button earliest but, not depriving everypne else of the opportunity to buy. Another thought is to only apply auto-invest to live loans & we take our chances on AM. I know I've lost out on many many units & continue to do so but, I've picked the odd ones here & there. This way, whilst it is a chance game to play, no one can blame a system or each other if we individually miss out. It'll just be a matter of catching the AM at the right time & place whilst having enough funds to buy. There's no easy solution, each one have positives & negatives.
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spockie
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Post by spockie on Mar 30, 2014 9:15:20 GMT
Should it be time based or value of loan parts bought, as if it's time based then what happens if no one sells any for a while but then there's a flood and the guy who bid first is now at the back of the queue? I think it has to be time based rather than random. An example, if X bid £1k. £1k of units came up for sale. X can be given say £200-£300 worth of units only & the rest divided equally amongst other eligible bidders in queue. That way, you've given a bit extra for the guy in front for his troubles of being first to press the button earliest but, not depriving everypne else of the opportunity to buy. Another thought is to only apply auto-invest to live loans & we take our chances on AM. I know I've lost out on many many units & continue to do so but, I've picked the odd ones here & there. This way, whilst it is a chance game to play, no one can blame a system or each other if we individually miss out. It'll just be a matter of catching the AM at the right time & place whilst having enough funds to buy. There's no easy solution, each one have positives & negatives. That would be my preference too - to leave the AM out of it. Like j, I've missed out on many occasions, but that is my hard luck. I've also been in the right place at the right time too.
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Post by chris on Mar 30, 2014 10:14:53 GMT
There are many reasons why leaving the aftermarket out of auto-invest is not an option. For example the way the site is evolving with ever growing reliance on underwriting; the way we think the marketplace is going to change over the coming year; the need for new investors to be able to diversify quickly; ensuring liquidity in the aftermarket.
So auto-invest will definitely be buying and selling loan units on the aftermarket and we'll need to find the right algorithm that works for all.
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j
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Penguins are very misunderstood!
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Post by j on Mar 30, 2014 10:45:16 GMT
There are many reasons why leaving the aftermarket out of auto-invest is not an option. For example the way the site is evolving with ever growing reliance on underwriting; the way we think the marketplace is going to change over the coming year; the need for new investors to be able to diversify quickly; ensuring liquidity in the aftermarket. So auto-invest will definitely be buying and selling loan units on the aftermarket and we'll need to find the right algorithm that works for all. Hmmmm....so, you think there will be enough loans coming through live & on AM to offer high liquidity? So, if members missed on some loans, esp on AM, they will pick others of similar rate/terms fairly quickly after due to the aforementioned?
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