As Abundance has grown, with more investors and a growing number of existing investments, the use of the marketplace has also increased. We are always looking for ways to improve the marketplace, such as making it easier to come to an investment decision by providing better information to both buyers and sellers.
On the marketplace, we show the price paid for each investment as a price to capital percentage. This is the amount paid as a percentage of the outstanding capital amount purchased. To calculate the average price paid for a particular investment, we have historically taken a simple mean average of the price to capital ratios of every trade concluded over all time. This provided a simple and easy to understand metric to give investors an idea of the historic price for a particular investment and gave equal weighting to each trade, irrespective of size.
However, for an investment that may have now been trading for a number of years, the average price may not always reflect recent trade prices if the value of the investment has fluctuated. Therefore, from 14 of April we will show a 12 month average price to give you more information about recent trade prices. The average price over all time will still be available within the Trade History for the investment.
In addition, we will be changing how the average is calculated. Instead of averaging the individual price to capital ratio for each trade, we will calculate the price to capital ratio of the total amount sold over that period. This means the average will more closely reflect the price of larger trades, whereas currently each trade has the same effect on the average, irrespective of size. We are looking at ways to support marketplace investors who are interested in buying or selling larger amounts and we think this change should help.
The trading volume and price paid used to calculate the average price will be shown on the Trade History page for each investment on the marketplace. You will also be able to select trading data for all time on this page as well as see a breakdown of the smallest, median and largest trade in the period.
These two changes may have an impact on the average price that is shown for a particular investment when the change comes into effect. The impact on prices for each investment is shown in the table below (accurate as at 2 April 2020):