Automated Secondary Market Trading
You Asked. We Delivered.
Update: LendingRobot has launched automated secondary market trading for Fully Automated mode. See details here.
For some time, users have requested that we extend our powerful automated investing tools to provide rule-based trading on the secondary note market.
We heard you, and LendingRobot has released a robust, yet easy to use, feature that will make the secondary note market more accessible and easier to participate in, all while increasing our clients’ ability to manage their portfolio risk and maximize their performance potential. The feature is immediately available for Lending Club accounts, to be followed by support for accounts on Prosper.
Advanced mode secondary market automated trading is enabled once client payment information is entered.
|Benefits to Buyers||Benefits to Sellers|
|Greater Access||Better Portfolio Management|
|Automates monitoring of the secondary market for new listings, improving the likelihood that you’ll purchase desirable notes before others do||Defining characteristics of holdings you’d like to liquidate increases your ability to manage risk vs. return characteristics at the portfolio level|
|Less Work||Increased Liquidity|
|Eliminates the need to manually search through secondary market inventory to find notes that match your risk profile and yield requirements||Making it easier for more participants to trade on the secondary market will make it easier to sell your notes in less time|
|Better Pricing||Optimal Pricing|
|Removes the need to manually compare potentially hundreds of like notes to find the best deal||Dynamically pricing each listing will make it possible to get the highest market price for your holdings|
Before using this feature you must first:
- Enable secondary market trading for your Lending Club lending account. If you haven’t already done this, simply log into your Lending Club account, click this link and follow the instructions provided.
- Add your Lending Club credentials to your LendingRobot account by selecting an account, clicking “Account Settings” on the left hand side, and entering your Lending Club user name and password.
Buying on the Secondary Market
To define rules for buying on the secondary market, select the account you want to set rules for, then click “Buy – Secondary Market” on the left hand side.
It’s easy to define rules for buying notes off the secondary markets:
- Define as many rules as you want
- Set a maximum daily investment amount per rule, allowing you to control how your funds are invested across multiple rules
- Define unique risk, price, and yield characteristics for every rule
Once your rules are defined and saved, LendingRobot will continuously monitor the secondary market for notes that match your criteria. Once a note is found, an order will be submitted on your behalf.
Note: We are committed to providing equal market access to all of our customers. Since secondary market inventory is limited, we will apply a random ordering of accounts when multiple customers’ rules are met.
Reviewing your Buy Orders
Your secondary market orders will be listed in your Order History on your dashboard. Note: a new “Origin” column has been added to differentiate secondary market orders from primary market orders.
Selling Your Notes
To initiate a sale on the secondary market, select the account you want to sell from, then click “Sell” on the left hand side.
It’s just as easy to define rules to automate the sale of your notes:
- Identify the notes you want to sell based on the notes’ performance and characteristics
- Define the pricing range for your sale based on a range of markups / discounts that you are willing to accept
- Set the duration for the sale
- Optionally define a sales goal for the rule
Once a sale is defined and started, LendingRobot will list the notes that match the criteria specified in the rule, for sale on Lending Club’s secondary market. Your sale will end when:
- All notes have been sold,
- The sale’s duration has elapsed, or
- The defined sales goal has been met
Note: The pricing for every note your rule lists will be dynamic, running an automated “Dutch auction”, starting with the highest end of the pricing range, and lowering it throughout the sale’s duration until the sale ends or the note is sold. The speed at which the price will be lowered is determined by the duration of the sale.
Reviewing your Selling History
Your selling history will be added to your dashboard. For each note sold you will see details, including the markup or discount at which the note was sold.
- Alex Neporozhniy
- June 24, 2015
- 0 Comment