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Post by tomas on May 1, 2017 8:38:51 GMT
What happens in case of fast rebuy by the issuer of the investment made on secondary market? It seems that I will lose as transaction cost and price premium will not be returned. For example if I buy loan that initially cost 10 Eur for 10.50 with premium and lower YTM in the beginning of month. Than the originator will rebuy it, than I will receive 10-10.5+0.1 (interest)=-0.4, which is lost! What is wrong in this assumption?
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Post by buttchopf23 on May 1, 2017 9:27:33 GMT
Your assumption is correct. Early redemption is always a risk when buying with premium.
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kulerucket
Member of DD Central
Posts: 336 
Likes: 93
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Post by kulerucket on May 1, 2017 21:41:34 GMT
I never buy anything at a premium. Unless you are lucky, the best loans on the SM are usually equivalent to PM loans currently available.
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Post by petebutt43 on May 8, 2017 4:33:07 GMT
Why are you buying at a premium then??
There are usually loans at a discount or at par, so why at a premium?
I am trying very hard to be polite and not call you a.....
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miso
Posts: 25
Likes: 8
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Post by miso on May 17, 2017 9:18:45 GMT
Why are you buying at a premium then?? There are usually loans at a discount or at par, so why at a premium? I am trying very hard to be polite and not call you a..... Buying 12% p.a. loan at 1% premium which has payment scheduled tomorrow is almost the same like buying the same loan with 0 premium 2 days after scheduled payment... 
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Post by petebutt43 on May 17, 2017 9:23:39 GMT
Why are you buying at a premium then?? There are usually loans at a discount or at par, so why at a premium? I am trying very hard to be polite and not call you a..... Buying 12% p.a. loan at 1% premium which has payment scheduled tomorrow is almost the same like buying the same loan with 0 premium 2 days after scheduled payment... OK, I understand that. Why bleat about it then? I would like to partake in the forum, without people bleating about the inconsequential, which only muddies the waters so important stuff might get ignored or missed!!
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kulerucket
Member of DD Central
Posts: 336
Likes: 93
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Post by kulerucket on May 17, 2017 9:54:02 GMT
OK, I understand that. Why bleat about it then? I would like to partake in the forum, without people bleating about the inconsequential, which only muddies the waters so important stuff might get ignored or missed!! Maybe then you should start by actually reading what people write properly then otherwise you are just making yourself look a bit of a tool. You initially accused the OP of buying at premium assumed they were therefore a "...", yet the OP simply asked about what happens *if* they were to buy at a premium, not they they did.
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