The London International Vintners Exchange, Liv-ex for short, is a business-to-business fine wine trading platform. A wealth of data is available to those in the trade, but we want to make sure you know how to interpret it.
With over 560 members in 43 countries, all of whom feed their transactional data into the exchange, Liv-ex provides a real time statistical backdrop to better inform our investment decisions.
Updating close to 40,000 times daily, this data allows Liv-ex members to review real time pricing and a wealth of historic statistics, ultimately bringing a level of transparency and insight to wine pricing and global liquidity at any given moment.
Liv-ex holds data on 110,000 products, known as LWINs, and the exchange has a collective value of over £100m in trading opportunities. It is this sheer size that makes Liv-ex an invaluable tool when it comes to understanding broad market sentiment and identifying macro sector trends.
Liv-ex also utilises this breadth of data to create market indices. The Liv-ex 100, an index following the performance of the 100 most sought-after wines, is now covered by Bloomberg. This has allowed fine wine to be considered and analysed alongside other financial markets more than ever.
With a multitude of criteria to consider we believe the more data you can review prior to purchase the better. Subsequently Liv-ex plays an important role within our fine wine investments.
Understanding Liv-ex Pricing
At BiBO, we believe that everyone should have access to free and accurate market prices for their fine wine. We also believe in radical transparency. To this end, it is important to understand the different prices Liv-ex offer, as many merchants and investment companies use different ones.
Liv-ex Mid Price Logic Decision Tree
This decision tree shows the algorithmic logic used by the Liv-ex system to discern pricing.
The image shows the algorithm is relatively thorough and effective for wines that have abundant listings and are frequently traded through the exchange. However, without the correct volume and sources of data to pull from, prices can become inaccurate.
This generally occurs with rare or illiquid wines that do not list or trade through Liv-ex regularly. Wines that are not commonly listed by merchants also result in dated price data or incorrect aggregations.
The significance of this is in the ability for investment managers to misquote portfolio values. The Mid Price can give a favourable impression of performance and ultimately mislead investors using the social confidence associated with the Liv-ex brand.