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Post by Ton ⓉⓞⓃ on Mar 7, 2014 18:31:39 GMT
AC is producing a tutorial video on Mark Downs,
Collection of Useful quotes on Mark Downs:
The other thing to note that may confuse is that the buy and sell instructions specify amounts as if the discount wasn't applied. Ie. if you have a buy instruction for £1,000 for par value or better and you happen to have some loan units available at a 10% discount then you will spend £1,000 to buy £1,111.11 of loan units. Likewise if you sell £1,000 loan units at 10% discount it will actually sell £1,111.11 of loan units to raise £1,000 of cash for you. This is talked about further HEREThe size of Mark Downs starts at 1% with graduations of 0.5% all the way and beyond 50% to a discount of 99.5% that a lot for asset backed loans... I'm reviewing this with my fellow directors today. 0.01% discounts are a bit over the top and just allow sellers to circumvent the allocation algorithms by trying to out do other lenders by the tiniest of fractions. This can also mean bypassing the underwriters and QAA when they're trying to sell down a loan without actually having to offer anything beyond the tiniest of discounts. 1% was chosen to make sure that lenders offering a discount have to overcome that hurdle to do so, rather than just play with bypassing the algorithms as a matter of routine. We're thinking of allowing 0.5% and possibly even 0.25% but no promises on that yet. See your point on discounting beyond 50%, will discuss that as well and most likely will change it. but following on from the board discussion Chris said... We've discussed the discounts and it's been decided that the current options will remain. Discounts aren't provided so that lenders can idly jump the queue or circumvent the balancing / prioritisation algorithms that have been put in place to keep the market balanced for the benefit of all lenders. A 1% discount, which as pointed out represents something in the region of 1 month of interest on average, is about right for someone looking for a speedy exit from an otherwise good loan. It's a hurdle but not an overly onerous one which is why we chose that level in the first place. Distressed loans have the option for higher discounts being offered. It should also be remembered that we don't charge lenders any fees for exiting a loan, such as a sale fee or even a fee based on breaching the amount of time you'd agreed to lend the funds. Such fees can greatly affect the cost to lenders. We'll keep this under review but for now the existing figures will remain in place. Presently Lenders are only allowed one buy/sell order on each each loan, but this is expected to change: chris earlier you implied it was permitted to have multiple orders on a loan with different criteria (as an explanation as to why marking paused orders in the "Your Instruction" column would be tricky. Yet when I go to add a buy order to a loan with an existing sell order it tells me to delete the existing order first. Can you clarify what circumstances more than 1 order are permitted ? When we enable it. Think I mentioned before it was disabled for now and would be enabled in a couple of weeks. Want to let everyone get used to it first before we add that layer of confusion.
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Post by Ton ⓉⓞⓃ on May 25, 2014 10:25:21 GMT
Chris' most recent comment on this subject is HERE (3rd Sept '15)
Andy Holgate emailed Lenders on 8th July 2015 with an update part quoted below:
.
Previous to that Chris' comment on this is Here & previously HERE
When the new system for markdowns is setup hopefully a new guide will be produced either here or elsewhere, if needed.
For anyone interested in trying to put a mark down on a unit to aid sale on the AM. This is how I did it and what I found.
Go to your loan units in the Dashboard find the stock you want to sell with a mark down then click on
'Show Units'
At this point you can either use the Bulk sell or select individual units. For this example I'm going to use Bulk Sell.
Type in the amount in £'s that you want to sell into the Bulk Sell Amount box. I want to sell £40. Then type in your Mark Down. I want a mark down of 2%, you have to put in a minus (-) sign then the 2. Be careful to delete the initial zero. Helpfully the system works out which particular units to sell to get to your target or as close as possible but not over your target. You will see the system copy your markdown against specific unit(s).  Click 'review sale', On the review screen you see your unit(s), the percentage markdown & other details but not the actual price that you will be selling them for. (Ed. The system has now been changed to show the new lower price that you will be selling at, so the piccy below needs slight updating.)  I f you want to change your mind click the 'No, Cancel this request' otherwise click 'Yes' and your units are now for sale.
Finally if you go to the AM if they haven't already sold, you will see:  In teresting Points; You can only mark down a price not up but many screens use the phrase 'Mark up' which is why we use the minus sign.
If you change your mind and the unit(s) have not sold yet. If you used AI to buy in the first place then go to the AI target for that stock and set it back to your original holding and this will cancel the sale as much as possible. But if you manually bought them then you may have to 'buy them back' from yourself to remove them from the AM as andy2001 Explains Here
These are my own findings and is not official. AC may change the way the system works. Please tell me if I'm wrong & I'll happily correct it.
Be careful when typing in your mark down as the system in normal operation requires a zero in that box. For example check that your -2% isn't infact a -20%. This is not a recommendation to do anything, just a guide. IN EDIT It seems there have been some changes to the way it works now, nothing too serious, the main change being that you now see the what price your unit will be on sale for before you actually put it for sale. I'll update this page at some point.
2nd EDIT 9/8/14 AC is planning a major update to it's systems (perhaps launching in Sept 2014). At which time this guide could become completely out of date or even misleading.
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Post by Ton ⓉⓞⓃ on May 25, 2014 10:29:57 GMT
The above should now all make sense along with the screen shots
I was thinking about making this 'sticky' while there might be a need of it.
Anyone know how that's done...
IN EDIT There are several informative links HERE about Markdown
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baz657
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Post by baz657 on May 25, 2014 15:18:10 GMT
Only forum staff can make a topic a "sticky".
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andy2001
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Post by andy2001 on May 25, 2014 15:25:22 GMT
Only problem is if you want to cancel using the Auto invest settings is they won't work on a loan that has them turned off such as the one people are most likely to be selling at a discount. In this case if you want to take the off the market you have to buy them from yourself. This will need funds in your account to cover the purchase even thought no net change in your balance will happen.
To find your own unit to buy if you can't see them from a unique discount value you will need to select lots of units and click "review your purchase" which can then be cancelled. It used to be possible to see who the seller is before this but user names where removed from the main sale page.
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Post by Ton ⓉⓞⓃ on May 25, 2014 15:59:09 GMT
Only problem is if you want to cancel using the Auto invest settings is they won't work on a loan that has them turned off such as the one people are most likely to be selling at a discount. In this case if you want to take the off the market you have to buy them from yourself. This will need funds in your account to cover the purchase even thought no net change in your balance will happen.
To find your own unit to buy if you can't see them from a unique discount value you will need to select lots of units and click "review your purchase" which can then be cancelled. It used to be possible to see who the seller is before this but user names where removed from the main sale page. Thanks for that point. I'm not an AI expert yet! But I have a suspicion that AI would still jump in and cancel the sale in effect. New units on the AM are added to the bottom of the list when there are units from the same loan already listed. So if you've just added them to the AM and no one else has done the same thing just after you; your units will be on the last page at the bottom. Which is what is seen in my last screen shot but isn't obviously so. If someone is trying to correct a mistaken sale and you happen not to get your exact same units back but perhaps someone else's, I'd be happy with that. No interest would be lost but simply deferred till the next payment day.
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andy2001
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Post by andy2001 on May 25, 2014 16:57:11 GMT
I have 2 units on Bol** up for sale, and they cant' be cancelled by auto invest.
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Post by bracknellboy on May 25, 2014 17:08:05 GMT
ADMIN Note: now done.
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Post by Ton ⓉⓞⓃ on May 25, 2014 19:00:46 GMT
I have 2 units on Bol** up for sale, and they cant' be cancelled by auto invest. I appreciate that info andy2001 I've updated the o.p. and put a link to your explanation. If I still need to update it just tell me again until I get it right. Hopefully it'll be useful to someone.
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andy2001
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Post by andy2001 on May 26, 2014 14:12:49 GMT
The Bol*** AI now seems to be able to pull orders as my units are now of the market.
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wysiati
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Post by wysiati on Jun 21, 2014 14:52:01 GMT
chrisCurrently, if a discount is applied to a loan part to help facilitate a sale it appears right at the bottom of the pile on page xxx, often behind hundreds of other loan parts offering poorer value to the purchaser. This may be primarily a function of timing but there does not appear to be a way for a prospective purchaser to rank according to % discount or, for available rate auctions in particular, % annualised rate. This also reduces the value of being able to offer a discount if it is hard for purchasers to spot them. Would it be unreasonable to have the default listing order better reflect the best value offered to the purchaser with those loan parts offering the highest discount to par and/or the highest % annualised rate displayed at the top of page 1, and/or at least to enable the user to rank the loan parts by these variables (Aftermarket markup / Annualised rate)? Thanks.
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andy2001
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Post by andy2001 on Jun 21, 2014 14:57:43 GMT
chrisCurrently, if a discount is applied to a loan part to help facilitate a sale it appears right at the bottom of the pile on page xxx, often behind hundreds of other loan parts offering poorer value to the purchaser. This may be primarily a function of timing but there does not appear to be a way for a prospective purchaser to rank according to % discount or, for available rate auctions in particular, % annualised rate. This also reduces the value of being able to offer a discount if it is hard for purchasers to spot them. Would it be unreasonable to have the default listing order better reflect the best value offered to the purchaser with those loan parts offering the highest discount to par and/or the highest % annualised rate displayed at the top of page 1, and/or at least to enable the user to rank the loan parts by these variables (Aftermarket markup / Annualised rate)? Thanks. On the Fu****ure loan if you type £100 in the box it currently selects a £100 unit at a 2% discount.
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Post by Ton ⓉⓞⓃ on Jun 21, 2014 15:08:22 GMT
And if you type in £1000 at the moment the system only wants £985.60 for 10units of £100 each wysiati, each one is reduced, i.e. it's finding them for you and working out the best deal for the buyer & seller. IN EDIT Thanks andy2001 for that I'll reword the opening post, or the second one maybe, to include your findings if that's okay? |
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wysiati
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Post by wysiati on Jun 21, 2014 15:18:27 GMT
Thanks for the info. I was looking from the perspective of someone who does not necessarily use autoinvest and just going in and trying to find my own loan part put up as an experiment on one of the loans. Doing so I found that some of the functionality I have been used to on other sites is (unusually for AC) currently lacking. I still think it would be a helpful addition, both as a prospective purchaser and as a seller to be able to see at a glance where the marginal offer has to be pitched in terms of any discount offered.
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mikes1531
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Post by mikes1531 on Jul 16, 2014 1:54:41 GMT
Has anyone ever tried to list a loan with a very small mark down?
As an experiment, I tried selling a unit with a 0.1% discount. The confirmation screen said the unit sale price would be £99.90, as I expected. I confirmed the sale, and the system reported that my unit had been listed for sale. When I looked at the end of the list of units for sale for that loan -- which AIUI is where a newly offered unit would end up -- all the units were priced at £100.
What am I doing wrong?
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The other thing to note that may confuse is that the buy and sell instructions specify amounts as if the discount wasn't applied. Ie. if you have a buy instruction for £1,000 for par value or better and you happen to have some loan units available at a 10% discount then you will spend £1,000 to buy £1,111.11 of loan units. Likewise if you sell £1,000 loan units at 10% discount it will actually sell £1,111.11 of loan units to raise £1,000 of cash for you.This is talked about further HERE
chris earlier you implied it was permitted to have multiple orders on a loan with different criteria (as an explanation as to why marking paused orders in the "Your Instruction" column would be tricky. Yet when I go to add a buy order to a loan with an existing sell order it tells me to delete the existing order first.
