Author Topic: Returns with trading  (Read 4922 times)

hoggy1

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Returns with trading
« on: January 13, 2015, 04:38:03 PM »
Surprised I haven't seen this mentioned by you heavy Folio traders. Just noticed after a folio purchase today that while there are "pending" purchases the account balance and returns are incorrectly calculated. On a folio purchase, available cash is immediately reduced reducing the account balance, adjusted account balance, and returns. The notes pending are not there yet so the outstanding principal has not been adjusted. The money is just gone. Sales are not affected this way. For pending sales neither the money nor the note are removed until settlement.
Steve

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Re: Returns with trading
« Reply #1 on: January 30, 2015, 08:40:49 PM »
It has always been this way, hoggy.  Pending purchases have always just kind of been ignored, and they threw a monkey wrench into most all calculations.  I hadn't considered the effect on return calculations, but in the past it never mattered to me because I've always been in a Folio-only state and thus had no returns to calculate.  Except for the Folio ones, but they do not rely upon the same numbers.

At least I'm _assuming_ there are still Folio-only states after the IPO?  I do not recall receiving any announcement emails.  Seems I have a lot of catching up to do.  While I let my account languish I think I've technically lost money the past 3 months straight.

By the way for those of you who sent me PMs today, no I was not raided by the FBI.  During my holiday travels my head gasket blew so I had to replace that which meant I was stuck here for 3 weeks working on it night and day.  (It takes so long only because I know not what I'm doing.)  And after that my boot hard drive failed.  Any last activity date on this forum was simply the result of Firefox reloading my saved tabs as I rebooted over and over whilst restoring stuff.

I hope somebody's been keeping track of LC's origination numbers before and after QZ 8501 crash.

hoggy1

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Re: Returns with trading
« Reply #2 on: February 03, 2015, 12:02:36 PM »
While I let my account languish I think I've technically lost money the past 3 months straight.

Is "technically" losing money anything like "technically" making it?
Steve

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Re: Returns with trading
« Reply #3 on: February 04, 2015, 08:51:45 PM »
Is "technically" losing money anything like "technically" making it?

Beats me.  :)

What I was getting at was... As a trader, I use a screwy accounting system that assumes I will break even on a trade.  If I buy a note at -20% which is current (and I plan to turn around and sell it soon), that doesn't mean it's worth full price so I don't post a gain then.  That would be silly.  Whereas LC's system does assume full value.  On the flip side I don't realize any potential losses either until it's sold.  Since I don't buy lates, sit on them, and pray for payments, this works out fine.

All good so far.  But...

Of course I do also hold some SarahV-type notes for the long term benefit.  Those are treated as par value but it requires me setting a checkbox for each of these that I plan to keep.  If I don't set that checkbox, the bot assumes only break-even and interest payments coming in just decrease the breakeven price and do not add account value.

Long story short (too late?) if I'm too busy for months at a time to babysit my stuff, my system shows losses even if they aren't necessarily "real".

I do not know of any better way to handle it for an active trader.  I don't like the idea of giving a note a fairy tale value based on (possibly flawed) assumptions and/or having wild fluctuations each month just because x,y,z changed in a group of notes, or if I refined my formula.   Predictions are fine for trying to make a good purchase but I'm not going to show an actual profit based on them until I have the cash in hand.

thezfunk

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Re: Returns with trading
« Reply #4 on: February 05, 2015, 03:59:26 PM »
...
By the way for those of you who sent me PMs today, no I was not raided by the FBI.  During my holiday travels my head gasket blew so I had to replace that which meant I was stuck here for 3 weeks working on it night and day.  (It takes so long only because I know not what I'm doing.)  And after that my boot hard drive failed.  Any last activity date on this forum was simply the result of Firefox reloading my saved tabs as I rebooted over and over whilst restoring stuff.

I hope somebody's been keeping track of LC's origination numbers before and after QZ 8501 crash.

No FBI raid, huh.  They must have stopped taking DanB's calls then.  ;D

Hard drive fail...time for an SSD!

thezfunk

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Re: Returns with trading
« Reply #5 on: February 05, 2015, 04:00:12 PM »
Is "technically" losing money anything like "technically" making it?

Beats me.  :)

What I was getting at was... As a trader, I use a screwy accounting system that assumes I will break even on a trade.  If I buy a note at -20% which is current (and I plan to turn around and sell it soon), that doesn't mean it's worth full price so I don't post a gain then.  That would be silly.  Whereas LC's system does assume full value.  On the flip side I don't realize any potential losses either until it's sold.  Since I don't buy lates, sit on them, and pray for payments, this works out fine.

All good so far.  But...

Of course I do also hold some SarahV-type notes for the long term benefit.  Those are treated as par value but it requires me setting a checkbox for each of these that I plan to keep.  If I don't set that checkbox, the bot assumes only break-even and interest payments coming in just decrease the breakeven price and do not add account value.

Long story short (too late?) if I'm too busy for months at a time to babysit my stuff, my system shows losses even if they aren't necessarily "real".

I do not know of any better way to handle it for an active trader.  I don't like the idea of giving a note a fairy tale value based on (possibly flawed) assumptions and/or having wild fluctuations each month just because x,y,z changed in a group of notes, or if I refined my formula.   Predictions are fine for trying to make a good purchase but I'm not going to show an actual profit based on them until I have the cash in hand.

So...you use mark-to-market accounting then?  :)

http://en.wikipedia.org/wiki/Mark-to-market_accounting

core

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Re: Returns with trading
« Reply #6 on: February 05, 2015, 07:35:20 PM »
Hard drive fail...time for an SSD!

It _was_ an SSD.  That was precisely the problem in this case.  Intel 320's (and a couple other Intel SSD series) have long had a bug that I wasn't aware of.  If you have to power off your machine without being able to properly shut down for whatever reason, odds are good it will wreck the device and you lose all your data unless you want to pay $1500 to the only company in the country who has Intel's secret info and can recover your data.  It's the "8MB bug".  The drive can be placed back into operating condition but your data is gone.

So...you use mark-to-market accounting then?  :)

No, I don't believe I do.  Not for my traded notes.  From my limited understanding of it from futures and options, MTM uses the market value of the investment and gains/losses can be posted as frequently as one wishes as conditions change.  Whereas I do not attempt to guess at the market value after I've bought them, and I do not account for any gains until the closing trade settles.

Fred

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Re: Returns with trading
« Reply #7 on: February 17, 2015, 11:43:12 PM »
I hope somebody's been keeping track of LC's origination numbers before and after QZ 8501 crash.

Hey, I was in Singapore for the 2015 New Year's Eve party!