Author Topic: Another Whale in the Sea  (Read 13102 times)

Bohb Daishi

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Another Whale in the Sea
« on: March 06, 2014, 12:45:55 AM »
Someone just bought up every note in the past-due market that were listed at >93% discount. It completely cleared out my "fire sale" inventory. If you want to sell your bad notes, do it now before the whale goes away.
There are three ways to make a living in this business: be first, be smarter, or cheat.

lender_john

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Re: Another Whale in the Sea
« Reply #1 on: March 06, 2014, 10:44:19 AM »
Someone just bought up every note in the past-due market that were listed at >93% discount. It completely cleared out my "fire sale" inventory. If you want to sell your bad notes, do it now before the whale goes away.

Looks like they took at least a dozen of mine as well.
Another dozen just missed the cutoff...


Keltset

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Re: Another Whale in the Sea
« Reply #2 on: March 06, 2014, 11:28:27 AM »
I had a very large number of my listed notes go pending as well... I love it when it rains profit :)

ggnoob1337

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Re: Another Whale in the Sea
« Reply #3 on: March 06, 2014, 12:37:11 PM »
Thanks for the heads up. Had a note with no payments since it was issued (on month 5 now) so I figured I'd lower it a little more and it just sold.

Bohb Daishi

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Re: Another Whale in the Sea
« Reply #4 on: March 06, 2014, 01:33:40 PM »
I had a very large number of my listed notes go pending as well... I love it when it rains profit :)

Selling notes at >93% discount "rains profit" for you? Surely, you must be joking. I mean, you can make a few pennies when the whale is around by front-running them. But I would hardly call that "raining profit".
There are three ways to make a living in this business: be first, be smarter, or cheat.

Keltset

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Re: Another Whale in the Sea
« Reply #5 on: March 06, 2014, 03:43:50 PM »
I had a very large number of my listed notes go pending as well... I love it when it rains profit :)

Selling notes at >93% discount "rains profit" for you? Surely, you must be joking. I mean, you can make a few pennies when the whale is around by front-running them. But I would hardly call that "raining profit".

Most of mine were highly discounted, but not to 93%- and yes when I have notes come into my portfolio, make a payment, and sell all in a very short period of time netting netting double digit returns during that timeframe; I do call that raining profits. I also consider higher than normal loss mitigation raining profits as well as it does highly increase the overall return. I have gotten very lucky this quarter- to bad I could not count on these numbers forever; although I do look forward to seeing what a longer term normalized return looks like using my strategies.

rawraw

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Re: Another Whale in the Sea
« Reply #6 on: March 06, 2014, 08:38:12 PM »
Your strategies will likely revert to the mean as Folio gets more efficient.  Enjoy the 1890s of the stock market while it lasts

Fred

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Re: Another Whale in the Sea
« Reply #7 on: March 06, 2014, 10:32:24 PM »
Trading FOLIOfn notes is like trading equity options; similar risk-reward profile, except that the theta is non-negative.

bobeubanks

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Re: Another Whale in the Sea
« Reply #8 on: March 06, 2014, 11:13:11 PM »
except that the theta is non-negative.

Why wouldn't theta be negative? Barring new information, notes become worth less with time just like options. 

core

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Re: Another Whale in the Sea
« Reply #9 on: March 06, 2014, 11:48:03 PM »
Why wouldn't theta be negative? Barring new information, notes become worth less with time just like options.

You must be talking about late notes?  Current notes become worth more with time (accrued interest) until the next payment hits, which I suppose would qualify as "new information".  Even after the payment posts, your investment may still be worth more because longer good payment history generally fetches a better price.  I'd say it depends what you're sitting on.

Fred

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Re: Another Whale in the Sea
« Reply #10 on: March 07, 2014, 12:45:31 AM »
except that the theta is non-negative.

Why wouldn't theta be negative? Barring new information, notes become worth less with time just like options.

Ceteris paribus, option's theta is deterministically negative with the passage of time.

Ceteris paribus, Folio note's theta is positive due to accrued interests -- as core also suggested.

As traders, we play the Folio game not in the deterministic field, but in statistical arbitrage one.

Jmar42

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Another Whale in the Sea
« Reply #11 on: March 07, 2014, 01:27:22 AM »
Do they have last sales real time on an api?

bobeubanks

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Re: Another Whale in the Sea
« Reply #12 on: March 07, 2014, 01:28:32 AM »
Ceteris paribus, Folio note's theta is positive due to accrued interests -- as core also suggested.

Theta, for options, simply captures the time decay and nothing else. Accrued interest on a note is part of the value of the note, and is thus much more akin to the price of the underlying stock for an option than theta.

Ceteris paribus, the value of an option decays as a smooth line to zero. Ceteris paribus, the value of a note decays the same way, though with a sawtooth pattern instead of a smooth line as interest accumulates and is paid. Theta describes the rate of overall decline pattern. I.E., the value of a note is more complicated than the value of an option, but theta is negative for both.

Fred

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Re: Another Whale in the Sea
« Reply #13 on: March 07, 2014, 02:08:00 AM »
Ceteris paribus, the value of a note decays the same way, ....

Care to elaborate more?

Bohb Daishi

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Re: Another Whale in the Sea
« Reply #14 on: March 07, 2014, 02:59:34 AM »
I love it when it rains profit :)
Selling notes at >93% discount "rains profit" for you?

Most of mine were highly discounted, but not to 93%- and yes when I have notes come into my portfolio, make a payment, and sell all in a very short period of time netting netting double digit returns during that timeframe; I do call that raining profits. I also consider higher than normal loss mitigation raining profits as well as it does highly increase the overall return. I have gotten very lucky this quarter- to bad I could not count on these numbers forever; although I do look forward to seeing what a longer term normalized return looks like using my strategies.

My comment was directed more to the specific strategy of buying notes at -95% and re-selling at -93%. Yes, the strategy can provide double-digit returns if it is properly executed. But to make even just a few bucks a day, you would have to push huge volume - something the market simply does not support. And if you execute this strategy by manually purchasing/selling, a part-time job at McDonalds might provide more income.


Ceteris paribus
Ceteris paribus

Quando nos satus in loquendo Latine? For past-due notes, the theta is in fact negative. Every day that a payment doesn't come in, the note is worth less.
There are three ways to make a living in this business: be first, be smarter, or cheat.