FAQs: Removal of the Lower Threshold

Why is WhiskyInvestDirect removing the lower threshold?

While the upper threshold helps protect the market and its users, WhiskyInvestDirect feels that the lower threshold restricts users from trading at the prices they choose without significantly improving the stability of the market

How do we calculate the market valuation?

A whisky’s initial price is determined by the price WhiskyInvestDirect buys it from our suppliers – we always sell to our clients within 2% of the price we have bought it for. We apply a percentage increase over time according to a whisky’s age and type, and adjustments to price can be made based on the amount of trading on that line, the performance of the WhiskyInvestDirect market, and data we receive from the wider Scotch whisky industry

What is the market valuation used for?

We use the market valuation to calculate the bids and offers that WhiskyInvestDirect places on the Live Order Board. We also use it to calculate the account valuation on your balance page, although this should not be taken to represent a guaranteed return on sale of your whisky

Are all restrictions on trading being removed?

No, the upper threshold of 10% over the market valuation will remain in place. Overvalued stock is a greater threat to the stability of the market than undervalued stock, and WhiskyInvestDirect still feels that an upper threshold has an important part to play in preventing the formation of a bubble in the market

Will this change affect prices on the platform?

WhiskyInvestDirect does not expect prices to move significantly as a result of this change. The removal of the lower threshold is aimed at helping clients who wish to sell their whisky quickly, and are happy to sell at a price below its intrinsic value. It will not change the value of the whisky itself, however buyers may now be able to find some offers at excellent value via the Live Order Board.

If I offer my whisky at below the previous threshold of 10%, am I guaranteed to find a buyer?

Offering your whisky at a lower price will be more attractive to potential buyers, but it does not guarantee a sale immediately. Selling is also dependent on there being a willing buyer for your whisky.