Author Topic: New FOLIO Trading Agreement  (Read 8051 times)

GS

  • Sr. Member
  • ****
  • Posts: 413
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #15 on: September 11, 2013, 06:09:15 PM »
Not a lawyer either, but its a statement to protect lending club and nobody else.  Its the standard CYA for "What?  I lost money?!?  Nobody warned me!!!1!  I'll sue!"

Good point, LC's primary concern is protecting LC.  What I meant is that LC *might* be getting calls from these dopes who have purchased notes with negative YTMs and asking them to undo the trade.  This statement protects the seller in that LC can point to the buyer's user agreement that he/she understood that people need to use their brains when they purchase notes.
« Last Edit: September 11, 2013, 06:10:57 PM by GS »

Fred

  • Hero Member
  • *****
  • Posts: 1421
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #16 on: September 11, 2013, 06:39:51 PM »
No idea why the yelling or whispering your Folio returns would matter.  It's not like LC doesn't have the data at its disposal . . .

Hmm, I now wonder where the "line" is between LC and FOLIOfn  -- as far as data is concerned.

Once a note has been sold to a FOLIOfn investor, ideally LC should not care who the new owner of the note is.  During monthly payment time, LC should just say to FOLIOfn something like "please pay x dollars to whoever owns this note."

Separation of concerns like this should allow non-LC FOLIOfn investors to buy LC notes from FOLIOfn.

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #17 on: September 11, 2013, 07:57:08 PM »
Scenario 2: I could also speculate that this is an indication of additional intent on LCs part that has already & will continue to have some very real consequences for the small number of individuals who have shown notable ingenuity & skill, enabling them to enjoy some nose bleed inducing return numbers to date..............But some of whom perhaps have lacked the wisdom, imo, to speak a little softer publicly (or not at all) about their exploits, thereby creating the conditions for inevitable countermeasures.

Ugh, this again.  All roads lead to Rome.  Ok Dan, you win for now.  My sig is on holiday.

I am not sure what "inevitable countermeasures" you are referring to.  They could disallow negative YTM prices, and this would not surprise me if it happened one day.  Maybe one day soon.  This would decrease traders' profits by a small amount but would not solve this "nosebleed returns" problem of which you speak.  I don't even understand why you're calling it a problem.

Like NJG said, what do you expect, LC to start kicking people out just because they are making xx% and that's simply more than one person should have?  Tell me this:  If what you're doing is on the level, why should they even care how much you are making? 

Folio makes a great deal off of trading commissions.  I know I pay them a substantial amount each month, way more that any of my brokers would get even if I was day trading.  I imagine that LendingClub gets to keep a healthy percentage of this rather than handing it all to Folio.  And LC keeps collecting the 1% loan servicing fee just as before.  They make more money the more times a note is traded.

Good point, LC's primary concern is protecting LC.  What I meant is that LC *might* be getting calls from these dopes who have purchased notes with negative YTMs and asking them to undo the trade.

They are almost certainly having to field calls from individuals, both on the buying and selling side, and I have a feeling this is what this is all about.  I have seen enough posts on other forums from people saying they have called in requesting trade cancellations which leads me to believe it happens quite a bit.  This is definitely a CYA thing IMHO.

Hmm, I now wonder where the "line" is between LC and FOLIOfn  -- as far as data is concerned.

I do not believe Folio is involved in any way, shape, or form.  Besides putting their name on it because they are registered with the appropriate agencies.  Look who runs both sites.  (Well it's not even 2 sites.)  Possibly the funds really do move during those 24 hours just to make it legal.  But I think that's where it ends.  If you call Folio and ask them to cancel a trade they will tell you they have nothing to do with it and have to call LC.  In all my dealings with LC I got the distinct impression that LC handles everything start to finish in the trading process.


DanB

  • Hero Member
  • *****
  • Posts: 665
  • A lie told often enough becomes The Truth!
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #18 on: September 12, 2013, 01:35:46 PM »
Scenario 2: I could also speculate that this is an indication of additional intent on LCs part that has already & will continue to have some very real consequences for the small number of individuals who have shown notable ingenuity & skill, enabling them to enjoy some nose bleed inducing return numbers to date..............But some of whom perhaps have lacked the wisdom, imo, to speak a little softer publicly (or not at all) about their exploits, thereby creating the conditions for inevitable countermeasures.

Ugh, this again.  All roads lead to Rome.  Ok Dan, you win for now.  My sig is on holiday.

I am not sure what "inevitable countermeasures" you are referring to.  They could disallow negative YTM prices, and this would not surprise me if it happened one day.  Maybe one day soon.  This would decrease traders' profits by a small amount but would not solve this "nosebleed returns" problem of which you speak.  I don't even understand why you're calling it a problem.

Like NJG said, what do you expect, LC to start kicking people out just because they are making xx% and that's simply more than one person should have?  Tell me this:  If what you're doing is on the level, why should they even care how much you are making?

Folio makes a great deal off of trading commissions.  I know I pay them a substantial amount each month, way more that any of my brokers would get even if I was day trading.  I imagine that LendingClub gets to keep a healthy percentage of this rather than handing it all to Folio.  And LC keeps collecting the 1% loan servicing fee just as before.  They make more money the more times a note is traded.

Good point, LC's primary concern is protecting LC.  What I meant is that LC *might* be getting calls from these dopes who have purchased notes with negative YTMs and asking them to undo the trade.

They are almost certainly having to field calls from individuals, both on the buying and selling side, and I have a feeling this is what this is all about.  I have seen enough posts on other forums from people saying they have called in requesting trade cancellations which leads me to believe it happens quite a bit.  This is definitely a CYA thing IMHO.

Hmm, I now wonder where the "line" is between LC and FOLIOfn  -- as far as data is concerned.

I do not believe Folio is involved in any way, shape, or form.  Besides putting their name on it because they are registered with the appropriate agencies.  Look who runs both sites.  (Well it's not even 2 sites.)  Possibly the funds really do move during those 24 hours just to make it legal.  But I think that's where it ends.  If you call Folio and ask them to cancel a trade they will tell you they have nothing to do with it and have to call LC.  In all my dealings with LC I got the distinct impression that LC handles everything start to finish in the trading process.



I suspect they don't care how much most of us are making. But then most of us are not in their face. There are some people who are. They definitely do care about perception & the only way that it is perceived that you can make those types of 1000% returns is by taking money off of a lot of other people................perhaps the type of people NJG referred to when he so eloquently made the case for the other side by saying that anyone needing a lawyer to understand the addendum shouldn't be trading here to begin with.

Whether one is doing something "on the level" is not only a matter of staying within the rules but also a matter of perception as well. You don't think perception matters for a company heading to IPO ,whose official raison d'etre was to " bring together investors and creditworthy borrowers so that both can benefit financially".  Oh but wait, someone is making 1000% off of the back of a whole bunch of other investors. But why should we care right? Yeah, that'll play well! 

Why are there monthly news reports of how much wealth the top 1% possess? Did they make their money "on the level" & why should anyone care? Well the general population cares enough for them to write the stories. What do you think is the general perception of how they accumulated their wealth? Do you think it matters that no one has proof that it was done by nefarious means ? Come on.

But why are we even discussing this when you've pretty much acknowledged the wisdom of my remarks already by deleting your signature line?

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #19 on: September 12, 2013, 02:06:16 PM »
I have certainly not acknowledged the wisdom of anyone's remarks.  I do, however, know better than to argue with high intelligence individuals who see things which do not exist.  It is a volatile combination.  Any offered "wisdom" can turn into a self fulfilling prophecy.


jinglander

  • Newbie
  • *
  • Posts: 19
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #20 on: October 11, 2013, 07:27:22 AM »
Scenario 2: I could also speculate that this is an indication of additional intent on LCs part that has already & will continue to have some very real consequences for the small number of individuals who have shown notable ingenuity & skill, enabling them to enjoy some nose bleed inducing return numbers to date..............But some of whom perhaps have lacked the wisdom, imo, to speak a little softer publicly (or not at all) about their exploits, thereby creating the conditions for inevitable countermeasures.

Ugh, this again.  All roads lead to Rome.  Ok Dan, you win for now.  My sig is on holiday.

I am not sure what "inevitable countermeasures" you are referring to.  They could disallow negative YTM prices, and this would not surprise me if it happened one day.  Maybe one day soon.  This would decrease traders' profits by a small amount but would not solve this "nosebleed returns" problem of which you speak.  I don't even understand why you're calling it a problem.

Like NJG said, what do you expect, LC to start kicking people out just because they are making xx% and that's simply more than one person should have?  Tell me this:  If what you're doing is on the level, why should they even care how much you are making? 

Folio makes a great deal off of trading commissions.  I know I pay them a substantial amount each month, way more that any of my brokers would get even if I was day trading.  I imagine that LendingClub gets to keep a healthy percentage of this rather than handing it all to Folio.  And LC keeps collecting the 1% loan servicing fee just as before.  They make more money the more times a note is traded.

Good point, LC's primary concern is protecting LC.  What I meant is that LC *might* be getting calls from these dopes who have purchased notes with negative YTMs and asking them to undo the trade.

They are almost certainly having to field calls from individuals, both on the buying and selling side, and I have a feeling this is what this is all about.  I have seen enough posts on other forums from people saying they have called in requesting trade cancellations which leads me to believe it happens quite a bit.  This is definitely a CYA thing IMHO.

Hmm, I now wonder where the "line" is between LC and FOLIOfn  -- as far as data is concerned.

I do not believe Folio is involved in any way, shape, or form.  Besides putting their name on it because they are registered with the appropriate agencies.  Look who runs both sites.  (Well it's not even 2 sites.)  Possibly the funds really do move during those 24 hours just to make it legal.  But I think that's where it ends.  If you call Folio and ask them to cancel a trade they will tell you they have nothing to do with it and have to call LC.  In all my dealings with LC I got the distinct impression that LC handles everything start to finish in the trading process.


Core,

Why do you have so many notes listed.  Whats your strategy

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #21 on: October 11, 2013, 08:45:32 AM »
Core,
Why do you have so many notes listed.

Because that's just how many notes I ended up with that particular week.  I post for sale 100% of the notes that I buy.  Why, you ask?  Because I want to sell them.  Any note that I keep around for months is just an opportunity for someone to default on me.

Whats your strategy

That's my secret sauce.  Preservative free and 100% vegetarian.  Not for sale to minors (or anyone else for that matter).   

However since you're new here, I'll be nice and at least give you some kind of answer:  My strategy is to make money using any and all slithery means at my disposal.  I currently buy notes and then sell them to people who are willing to pay a premium due to time constraints or sheer foolishness.  That is not a constant though, and there's only a finite supply of fools out there.  Every change that LC makes can close one door but it may at the same time open many other paths to profit.

Joleran

  • Full Member
  • ***
  • Posts: 151
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #22 on: October 11, 2013, 11:11:00 AM »
Core, it's fairly apparent that you're generally working on a high volume method, but I find it surprising you're able to identify so many notes for sale that can stand a price increase of over 1% to balance the sales fee on your side and still flip quickly. 

Thoughts:
FolioFn is comprised of two main streams of notes: fast moving notes that people using automated tools snap up very quickly, and slow moving notes that sit around.  You can't be targeting the fast moving notes because you couldn't get the volume you need, and you can't be targeting the slow moving notes because they're already moving slowly.  You therefore seem to have some ability to take a loan that would sit around and turn it into a note that sells fairly quickly while making a profit.  There's no obvious logical way this could happen, so one of the following is most likely true:

There are a ton of totally irrational buyers that buy marked up notes they wouldn't buy when they were less marked up
You're better and faster on the trigger to grab the quick moving notes than I think is possible at your volume
You have a personal algorithm to pick out slow moving notes that will sell reliably but slowly at a higher price
You have some way of marketing your notes as good buys to the public

rawraw

  • Hero Member
  • *****
  • Posts: 2768
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #23 on: October 11, 2013, 11:25:56 AM »
Core, it's fairly apparent that you're generally working on a high volume method, but I find it surprising you're able to identify so many notes for sale that can stand a price increase of over 1% to balance the sales fee on your side and still flip quickly. 

Thoughts:
FolioFn is comprised of two main streams of notes: fast moving notes that people using automated tools snap up very quickly, and slow moving notes that sit around.  You can't be targeting the fast moving notes because you couldn't get the volume you need, and you can't be targeting the slow moving notes because they're already moving slowly.  You therefore seem to have some ability to take a loan that would sit around and turn it into a note that sells fairly quickly while making a profit.  There's no obvious logical way this could happen, so one of the following is most likely true:

There are a ton of totally irrational buyers that buy marked up notes they wouldn't buy when they were less marked up
You're better and faster on the trigger to grab the quick moving notes than I think is possible at your volume
You have a personal algorithm to pick out slow moving notes that will sell reliably but slowly at a higher price
You have some way of marketing your notes as good buys to the public
Core is a shady computer programmer with possible connections to the Russian mafia.  So I'd say its probably the algorithm to grab quick moving notes.

core

  • Hero Member
  • *****
  • Posts: 1784
  • Your loss is my gain
    • View Profile
Re: New FOLIO Trading Agreement
« Reply #24 on: October 11, 2013, 12:08:07 PM »
You have some way of marketing your notes as good buys to the public

I assure you, this is next on my list when I have the time.  Probably not in the manner you had in mind, though.

All in all, that was a very logical and well thought out post, Joleran.  There are some flaws with some of your arguments though.  Obviously I'm not going to correct you. ;)

A couple other possibilities you missed:
  • I may have found a way to get more information than the average Joe.  For example if one could identify a grace period note which is going to current before the payment shows as being posted, you make a lot of profit in 4 days.
  • LC's own practices and botched payment postings make it possible to turn a quick profit.  Also think of the opportunities presented by the coming holiday.
  • It could be possible to "scare" people into parting with a note for a lower price than they otherwise would.  Likewise, the way IR tracks sale prices is wide open to abuse.
... and probably many more.  Whenever money is changing hands, there's always a way to make money from it.  Even moreso once you decide not to be limited to the way you're "supposed" to play the game.

Core is a shady computer programmer with possible connections to the Russian mafia.

Shady, you betcha.  But I would have nothing to do with those communists that have nukes aimed at Nebraska.  If the Russians are ever allowed to invest on LC we are all done for.   If there's anything the Russians are good at, it's finding exploits.