Bid sniping is watching a loan until the last possible moment and stepping in a bidding. This can be done on both loans that are fully funded and loans that are not yet fully funded.  This is the only optimal strategy for large lenders bidding on non auto funding loans. 

For example, pensioner (among others) has on occasion fully funded an entire loan by himself.  If the loan were a non auto funding and he made his bid on the first day of a 10 day auction, he would almost certainly be outbid on the loan by the time it closed.  He would have moved to the market.  (The same is not true for auto funding.  If it were an auto funding he would have closed the auction with one bid.)

Now someone bidding $50-$200 can hardly move the market and thus bid snipping is not necessarily the optimal strategy strategy for a small time lender.  For both small and big lenders the optimal strategy for auto funding loans is to bid as soon as you find them.  The best ones aren’t around long.

Non auto funding loans are a different animal.  For large lenders, the optimal tactical strategy is to sit and wait.  Let the little guys bid and at the last second snap up the loan.  From my viewpoint and just as attempt to keep my money in play I bid non auto funding loans withing 36 hours of completion.  But there are arguments for bidding early or late (in fact is is a classic prisoner’s dilemma).  But for large lenders, there is no choice.  Moving the market kills their ROI.  They can’t afford to do that.

How comfortable are large lenders with giving out your user name and password?  It would be possible to build a bid snipping application using screen scraping and similar techniques.  To to deploy the application you would need to provide a user name and password.  Interested? 

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