Post: Selling Delinquent Notes, Part 1: Loss Aversion

[AnilG]

Part 1 of my analysis of listings of delinquent loans on Folio is out on PeerCube blog. It has been interesting ride to say the least.

Selling Delinquent Notes on Lending Club Folio Secondary Market, Part 1: Loss Aversion
https://www.peercube.com/blog/post/selling-delinquent-notes-on-lending-club-folio-secondary-market-part-1-loss-aversion

[Rob L]

Thanks for the interesting analysis.
From Charts 1and 2 it appears IGP sellers have a preference for "round numbers"; discounts that are multiples of 5%.
At least that's what the little squiggles on the density charts look like to me.
The smoothing of the plotted lines may even mask this preference somewhat.
I've heard it said that similar preferences are found in stock trading (stop loss levels, etc.)

[AnilG]

Good catch. I didn't really look into it. Might be worth investigating for both Markup and Price.

Thanks for the interesting analysis.
From Charts 1and 2 it appears IGP sellers have a preference for "round numbers"; discounts that are multiples of 5%.
At least that's what the little squiggles on the density charts look like to me.
The smoothing of the plotted lines may even mask this preference somewhat.
I've heard it said that similar preferences are found in stock trading (stop loss levels, etc.)