Author Topic: How to get API access  (Read 13384 times)

pasvincome

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Re: How to get API access
« Reply #15 on: November 20, 2013, 10:17:25 PM »
Where do these investment grade notes come from? Again, institutional investors are not selling their notes on Folio.

I don't think a snapshot at origination of only the stated income, city/state, credit data, and employer is going to enable institutional investors to snatch up 100% of the "good" loans.  You just don't know how they're going to play out.    All they can do is grab some that look good based on very limited information.

But once on Folio and there's several months of payment history behind them, you've just eliminated all of the 1-and-out scammers, you know who lied about the loan purpose, maybe even get a feel for who started rack up debt again, and in general you have a much better feeling for who's going to pay.  Even if you don't believe a word of this paragraph, there are tens of thousands of really good notes on Folio that look good now and looked good at origination, and yes many are overpriced (many are not), but they got there somehow.  If your theory was true they shouldn't be there at all.  Institutions aren't getting 100% of the good stuff.  Not yet.

If you'd like, why not run a simple test?  Whip up your super-duper filters that are going to pick you out the best loans.  See how many brand new notes you get after a week from new originations.  Then run those same filters on Folio (no cheating) and see if you don't still find tons of them.


I think what the interesting opportunity would be is providing liquidity in the Folio market. It seems like nobody is pumping serious money into it but there is enough interest for it to be substantial. For example, if I can get API access, maybe I could just run filters for notes that are hot sellers on Folio? Do you have insight into if this would be a good strategy or not? Basically arbitraging the two markets.

Why doesn't a group of guys like you pool together money into a company to do something like this? Then maybe you can get access to more loans like "institutional" investors. It seems reasonable that a group of smaller investors could get together and do $1MM in loan origination volume a month.

core

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Re: How to get API access
« Reply #16 on: November 20, 2013, 10:38:25 PM »
Do you have insight into if this would be a good strategy or not? Basically arbitraging the two markets.

It isn't exactly an everyday occurrence that I'm able to sell a brand new issued note for much over 1% on Folio, and that's your break even point after commissions.  This is after you've had your cash tied up for 3-4 weeks and have had a lot of loans canceled.  Just to break even?  No thank you.

Of course I normally get hold of them after they are already unwanted by somebody else so my data isn't exactly a great example.  If you came up with some very very hot sellers that consistently sold for 2-3% in a couple days, every one of them, then maybe you'd have a chance at making a few cents for your trouble.   Actually now that I do the math, 1% profit after a month of funds tied up is even less than you'd get from just being a regular buy and holdie.  Again not counting cancellations.  That doesn't sound too profitable!

If I was going to do this I don't think I'd even consider it unless I was well funded enough to absolutely corner the market and lock everybody else out so they had no choice but to buy on Folio.  Given the lag between funding and the first possible sale date, that would require a _lot_ of money.  Any less and the pennies made just wouldn't be worth it.

pasvincome

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Re: How to get API access
« Reply #17 on: November 20, 2013, 10:59:11 PM »
Do you have insight into if this would be a good strategy or not? Basically arbitraging the two markets.

It isn't exactly an everyday occurrence that I'm able to sell a brand new issued note for much over 1% on Folio, and that's your break even point after commissions.  This is after you've had your cash tied up for 3-4 weeks and have had a lot of loans canceled.  Just to break even?  No thank you.

Of course I normally get hold of them after they are already unwanted by somebody else so my data isn't exactly a great example.  If you came up with some very very hot sellers that consistently sold for 2-3% in a couple days, every one of them, then maybe you'd have a chance at making a few cents for your trouble.   Actually now that I do the math, 1% profit after a month of funds tied up is even less than you'd get from just being a regular buy and holdie.  Again not counting cancellations.  That doesn't sound too profitable!

If I was going to do this I don't think I'd even consider it unless I was well funded enough to absolutely corner the market and lock everybody else out so they had no choice but to buy on Folio.  Given the lag between funding and the first possible sale date, that would require a _lot_ of money.  Any less and the pennies made just wouldn't be worth it.


It seems viable to break into this "institutional offering" that they have. That's apparently where the time advantage is, that is, where notes get funded very quickly. Running some stats on what notes fund the fastest, assuming very fast access to it, would probably be the key -- don't you think?

Joleran

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Re: How to get API access
« Reply #18 on: November 20, 2013, 11:02:40 PM »
It seems viable to break into this "institutional offering" that they have. That's apparently where the time advantage is, that is, where notes get funded very quickly. Running some stats on what notes fund the fastest, assuming very fast access to it, would probably be the key -- don't you think?

I'm not sure you understand the terms.  There's the whole loan program, where you can buy an entire loan all for yourself, but at an average of say $10k a loan, you're going to need 3mm to just start to get the diversification you need, and no one's going to save you on folio.  The other path is automation, and if you know how to do some basic quant work, why share the profits?  There's no early access to non-whole loans for institutional investors.

core

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Re: How to get API access
« Reply #19 on: November 20, 2013, 11:47:22 PM »
I don't know.  This race for new notes 4 times a day reminds me of a bunch of convicts fighting over stale cornbread in the chow line.  A big race to take the shaft.

You can get the same exact notes on Folio, get them instantly, without fuss, and you can get them for cheaper.  Now maybe it won't always be that way if the institutional guys truly take over 100% (and if they never sell them), but it is that way now.  And if you only have a fixed amount to invest in one go, that's all you should care about.

Just a big rat race to make 14.10% instead of 14.05%.  Big yawn.  While the warden's up there eating steak.

If you do want to get a bunch of investors together though, I'd be all for causing some trouble.  If we had the funding I could throw something together which locks up 100% of every note in 300 milliseconds and really take some people straight out to the woodshed.  "Please sir, beat me again" is what they'll be saying.  I figure a few hundred $million should be enough.  Unfortunately I don't have friends with that kind of money.

pasvincome

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Re: How to get API access
« Reply #20 on: November 20, 2013, 11:58:30 PM »
I don't know.  This race for new notes 4 times a day reminds me of a bunch of convicts fighting over stale cornbread in the chow line.  A big race to take the shaft.

You can get the same exact notes on Folio, get them instantly, without fuss, and you can get them for cheaper.  Now maybe it won't always be that way if the institutional guys truly take over 100% (and if they never sell them), but it is that way now.  And if you only have a fixed amount to invest in one go, that's all you should care about.

Just a big rat race to make 14.10% instead of 14.05%.  Big yawn.  While the warden's up there eating steak.

If you do want to get a bunch of investors together though, I'd be all for causing some trouble.  If we had the funding I could throw something together which locks up 100% of every note in 300 milliseconds and really take some people straight out to the woodshed.  "Please sir, beat me again" is what they'll be saying.  I figure a few hundred $million should be enough.  Unfortunately I don't have friends with that kind of money.


How much are you investing into Folio?

It doesn't seem like it will take that much money. @ $2.7MM in loan originations per day, a fund of $2MM churning liquidity into the Folio market is about 2.5% of LC's business. That's a pretty big percentage. It seems LC should be able to make some sort of concession such that you can do "whole loans" and break them into smaller notes for Folio. Why not?

core

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Re: How to get API access
« Reply #21 on: November 21, 2013, 12:16:55 AM »
How much are you investing into Folio?

Well I'm a trader, not an investor, so what I do probably isn't relevant to your situation.  I haven't had a need for more than $50k circulating in there.  I can say with confidence though that if I wanted to get 100k (I think that was your figure) invested in good stable high-yield notes it wouldn't take more than a month or two tops, and that's just saving the good stuff.

It doesn't seem like it will take that much money. @ $2.7MM in loan originations per day, a fund of $2MM churning liquidity into the Folio market is about 2.5% of LC's business. That's a pretty big percentage. It seems LC should be able to make some sort of concession such that you can do "whole loans" and break them into smaller notes for Folio. Why not?

Actually I could swear I read somewhere that they do allow whole loan investors to split them up for Folio.  I have no idea where I got that but it stuck in my head.  Maybe the guy who said it was mistaken.  At any rate, I think it's safe to say that LC would not make it any easier for you to corner the market and resell to Folio like that.  On the contrary, they would probably try to stop you.  One would need to employ some countermeasures.  I don't think $2MM would do much because keep in mind the ~3 weeks it could take before you can even sell the first note.  And for it to have any effect on the market you need to be able to grab all the good ones and hoard them until they can be sold.  Maybe $25MM would be a more realistic figure on the low end.

pasvincome

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Re: How to get API access
« Reply #22 on: November 21, 2013, 12:49:54 AM »
How much are you investing into Folio?

Well I'm a trader, not an investor, so what I do probably isn't relevant to your situation.  I haven't had a need for more than $50k circulating in there.  I can say with confidence though that if I wanted to get 100k (I think that was your figure) invested in good stable high-yield notes it wouldn't take more than a month or two tops, and that's just saving the good stuff.

It doesn't seem like it will take that much money. @ $2.7MM in loan originations per day, a fund of $2MM churning liquidity into the Folio market is about 2.5% of LC's business. That's a pretty big percentage. It seems LC should be able to make some sort of concession such that you can do "whole loans" and break them into smaller notes for Folio. Why not?

Actually I could swear I read somewhere that they do allow whole loan investors to split them up for Folio.  I have no idea where I got that but it stuck in my head.  Maybe the guy who said it was mistaken.  At any rate, I think it's safe to say that LC would not make it any easier for you to corner the market and resell to Folio like that.  On the contrary, they would probably try to stop you.  One would need to employ some countermeasures.  I don't think $2MM would do much because keep in mind the ~3 weeks it could take before you can even sell the first note.  And for it to have any effect on the market you need to be able to grab all the good ones and hoard them until they can be sold.  Maybe $25MM would be a more realistic figure on the low end.


I don't get why they care about someone creating liquidity in Folio, as it furthers their purpose.

So $25MM to corner the market. $2MM to corner 8% of it? :D. I don't see why you need that much money even. Basically you need to break into the "preferred class" such that you have access to notes that other people don't. That is the barrier. I think it is even lower than $2MM in monthly churn.

Actually now that I read about it, the whole loan program receives loans that are randomly chosen. Thus if I get API access then I can get access just as good anyone else can, no? Is API access really not that great? Otherwise, why haven't people created a fund like this to request API access and trade away on the "good" stuff? I'm trying to get straight to the point of why exactly people complain about "those institutional guys" but can't seem to find a solution?

core

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Re: How to get API access
« Reply #23 on: November 21, 2013, 01:08:21 AM »
Is API access really not that great?

Oh, was that the key to this whole idea?  No, API access is "not that great".  It doesn't give you anything that you couldn't do through screen scraping.  In fact since you can't use the shopping cart loophole through the API, it's actually a disadvantage.  If you want to grab notes before other people can get them, the API is not the way to do it.  A simple phone call should get you access, for what it's worth.  But there is no barrier except speed.

Cornering 8% of the market wouldn't do much good because there's already tens of thousands of notes on Folio.  Good notes.  What would you hope to add to it?  To make money you'd need to create an artificial shortage somewhere.  Leaving 92% on the primary side isn't going to drive people to Folio to buy your notes.  And the people who are on Folio already aren't interested in paying a markup for a small handful of new ones.   I get the impression you think Folio is hungry for more notes.  It's not.  Not at present anyway.  Just look at all the filters they've added recently!   SarahV was having problems selling some of her good ones at par; how are you going to squeeze a premium out of buyers?

pasvincome

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Re: How to get API access
« Reply #24 on: November 21, 2013, 01:14:57 AM »
Is API access really not that great?

Oh, was that the key to this whole idea?  No, API access is "not that great".  It doesn't give you anything that you couldn't do through screen scraping.  In fact since you can't use the shopping cart loophole through the API, it's actually a disadvantage.  If you want to grab notes before other people can get them, the API is not the way to do it.  A simple phone call should get you access, for what it's worth.  But there is no barrier except speed.

Cornering 8% of the market wouldn't do much good because there's already tens of thousands of notes on Folio.  Good notes.  What would you hope to add to it?  To make money you'd need to create an artificial shortage somewhere.  Leaving 92% on the primary side isn't going to drive people to Folio to buy your notes.  And the people who are on Folio already aren't interested in paying a markup for a small handful of new ones.   I get the impression you think Folio is hungry for more notes.  It's not.  Not at present anyway.  Just look at all the filters they've added recently!   SarahV was having problems selling some of her good ones at par; how are you going to squeeze a premium out of buyers?


Yes, I get the impression that most "normal" originators (not ones trying to game the system or catch super-great notes quickly) are the ones SELLING on Folio. Why else would they be selling at a discount? Only other reason I can think is that there is a lack of demand in the Folio market? Trying to weigh if it's note quality bias on Folio vs. lack of demand.

core

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Re: How to get API access
« Reply #25 on: November 21, 2013, 02:01:15 AM »
They don't all sell at a discount.  Lots sell at a reasonable markup.  Keep in mind you're only seeing the leftovers that didn't sell.

Your premise is that originated notes which fund in the first few seconds are better than everything that's on Folio.  I think this is completely backwards.   I don't see any shortages, no barriers, no lack of demand, no nothin'.  The only shortage of C-E notes is in people's heads because they're too chicken to buy anything on Folio, or because it doesn't work with their filters. 

I'll try to be more clear:
Your brand new notes that you snatched up in 5 seconds sell for crap. (near par)  No payment history == bad
Good payment history and up credit score == profit and 5% markup.

They don't want what you are selling.  The cornbread convicts won't even buy them because generally their filters and autoinvestors are all geared towards originations and so they don't even know your note is so good, if it is.  There's no arbitrage in selling a marginal product to people who know better.

pasvincome

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Re: How to get API access
« Reply #26 on: November 21, 2013, 02:11:51 AM »
They don't all sell at a discount.  Lots sell at a reasonable markup.  Keep in mind you're only seeing the leftovers that didn't sell.


Take out the "leftovers". What are the notes that are not "leftovers"?

core

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Re: How to get API access
« Reply #27 on: November 21, 2013, 02:23:34 AM »
People do sell at a markup just to make a quick profit.  (They bought them in the first place to do so) Some folks sell because they get fed up with this or that.  Some people have a sudden need for cash.  Sometimes auto-sell algorithms get confused when LC doesn't process payments that day.

There are tons of reasons notes show up on Folio without being "leftovers".  If they're fairly priced they sell quickly and you may never see them.

pasvincome

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Re: How to get API access
« Reply #28 on: November 21, 2013, 02:38:04 AM »
People do sell at a markup just to make a quick profit.  (They bought them in the first place to do so) Some folks sell because they get fed up with this or that.  Some people have a sudden need for cash.  Sometimes auto-sell algorithms get confused when LC doesn't process payments that day.

There are tons of reasons notes show up on Folio without being "leftovers".  If they're fairly priced they sell quickly and you may never see them.

Not sure, but your trading strategy seems to be based on a collection of bugs and exceptions. How much can that scale? You say more than $50k in float isn't needed to do your strategy, is operating capital maxed out to its productive potential? How much can a person actually make even doing your strategy full time (assuming they are a resourceful programmer, can do the scraping etc things you refer to).

core

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Re: How to get API access
« Reply #29 on: November 21, 2013, 02:51:13 AM »
I was just giving you a list of reasons good non-leftover notes might be on Folio; I wasn't saying that that's what kind of notes I purchase or look for.  And no, my capital isn't maxed out to its full productive potential.  Normally I have tons sitting around doing nothing either because nothing's available to buy that month, or sometimes because of my own laziness, not wanting to look for notes. ;)

I wouldn't even want to hazard a guess as to how much a person could make with their own special strategy.  I can say I make the equivalent of a full time job... not a very good full time job mind you, but a full time one.  I spend several hours a day trading and I've got a 6 page document full of ideas that I want to try whenever I can find time.  The sky's the limit.  I'm sure there are people here with good ideas making a killing.