Lesson 12 of 25 · 6 min

How several BNPL plans stack

Several small BNPL plans share one cash date, so the month sees a sum, not three tickets.

One BNPL plan is a small installment. Several plans that fall on the same cash date are one claim on that date. Track 7 lesson 10 is the securities version: correlated names are one name for haircut purposes; the count of holdings is uninformative. Stacked BNPL is that count-versus-sum on a household month. The collateral here is the month's cash.

Three invented plans. $180 over 6 is $30. $240 over 4 is $60. $96 over 3 is $32. This month they sum to $30 + $60 + $32 = $122. None is large. Together they are $122 of the same cash date as Tallow Yard Autos' $466.02 car installment. The month does not see three tickets. It sees $122, and it sees $466.02, and those two figures share a calendar.

Correlation in Track 7 is prices that move for the same reason. Correlation here is due dates that land in the same month. The plans can be from different shops and still be one position for capacity purposes, because the denominator is one month's cash. Lesson 21 returns to this geometry with five payments that are each below a round number. This lesson is the BNPL version: three small installments, one sum.

Three plans, three small figures, one cash date. The position is $122. The count is three, and the count is uninformative.

Key terms

Stacked BNPL: Several short installments whose due dates share a month. The month sees the sum.
Cash-date capacity: What the month can meet on that date. The denominator that turns several tickets into one position.
Count versus sum: Track 7 lesson 10's distinction. Three plans are not three independent claims on the month's cash.

Worked example

Three tickets, one date

Three invented BNPL plans due this month: $180 / 6, $240 / 4, $96 / 3. The car installment from Track 22 is $466.02 on the same date.

Plan A this month: $30
Plan B this month: $60
Plan C this month: $32
BNPL sum: $122
Same cash date as: $466.02

None of the three is large. The month's BNPL position is $122, and it shares a date with $466.02.

Check yourself

Three BNPL plans due this month: $120 / 4, $192 / 4, and $72 / 3. What is this month's BNPL sum, and what is the count of plans doing as a measure of the claim?

Stacked BNPL is several small lines that share one cash-date capacity, the everyday version of Track 7's point that correlated positions are one position for collateral purposes — here the collateral is the month's cash. Open Correlated names are one name for haircut purposes →

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Educational only. Nothing in this lesson is investment, legal or tax advice, or a recommendation to enter into any transaction. Figures are illustrative and computed from the inputs stated in the lesson.