What to do while waiting to sale materials--easy arbitrage
Mon, 04/25/2011 - 16:47
Sometimes you take a break and wait to see if ya get any whispers while hawking your wares, or you just feel like standing around haven. Or for example, i was watching the basketball games and i want to sell but not put so much effort in that i miss the games, therefore only do it during commercials. Anyhow, any down/slow time you can do this.
The CE market is never at equilibrium. In fact, you can almost always make a profit simply buying and reselling energy. Usually the price difference between WTS and WTB is about 100-150 crowns. And the WTS takes a 2% cut of your crowns. Therefore, you can repeatedly buy then re-sale then re-buy energy and make a 40-80 crown profit each time. Boring? yes. Minimally profitable? yes. But i did make about 1k crowns profit while watching the basketball games when otherwise i would not have even turned it on.
Mon, 04/25/2011 - 18:15
#2
*looking for thread report
*looking for thread report button...*
Mon, 04/25/2011 - 20:42
#3
i posted because
Because there are like 25 people active on the forums. And i want to help out my 25 cohorts active on the forum. Relax, it's not gonna make a noticeable difference in you life.
Holy hell, this board loves to over-react to everything.
Mon, 04/25/2011 - 20:46
#4
BTW
BTW, dungeoning is a quicker way to make money. This is gonna be most helpful to some poor new guy who has trouble making his 1 two-star item and running a dungeon. He can arbitrage himself 500 -1k crowns over an hour, make his item and still do a run. Those of us playing for over 2 weeks can do a dungeon and make more money in the same time frame. Relax. Big picture.
Mon, 04/25/2011 - 20:47
#5
This guy just went full
This guy just went full r-
Wait. I'm not entirely sure I'm allowed to say that on the forums.
But yeah, wtb thread report button.
Mon, 04/25/2011 - 20:51
#6
In general, I suspect that
In general, I suspect that playing the daily & weekend fluctuations will prove more profitable than arbitrage, in the larger scale.
Good arbitrage is a recipe to gain 10-150 crowns per transaction. If you're unlucky, you get stuck on 'the wrong side' of the equation (holding crowns where you need CE, or the reverse) when the market deflates or inflates on a daily or weekly cycle.
...Not that I *know* the flow of those cycles; that's just a best guess based on my limited observations.
Mon, 04/25/2011 - 20:59
#7
Also, what is there to
Also, what is there to report?
It's a market. It acts like one. You can play it like one. That's the design.
Why would Three Rings want or expect people to do otherwise?
Mon, 04/25/2011 - 21:11
#8
Reporting for the
Reporting for the POINTLESSNESS of it all
Mon, 04/25/2011 - 21:27
#9
There's nothing pointless
There's nothing pointless about it, though. It's an entirely valid way to make crowns. In the larger picture, it keeps the balance of CE-crown exchanges as close as possible, which is actually a good thing.
The people doing this are taking care of the annoying job of actually managing the numbers behind "buy it now" to match supply and demand, juggling the money as they go. In return, they get to keep the change.
Mon, 04/25/2011 - 21:42
#10
thanks
@Leviathan, thanks.
@Skype1, i agree this is going to pointless for many players. But consider this example. Your new--there is a point in the game early on, where recipes are 1000 crowns for 2-star gear. You exit the dungeon friday night after work with little energy and just enough to buy more. At this point in the game, it could be of great value to arbitrage up the cost of your recipe. Then you can buy the recipe, buy the 100 energy, make the weapon that night. And then the next morning when you go play you have your remaining 50CE you bought and the 30-40 ME that generated over night while you slept, AND your new weapon. That is just at 80 or so energy, enough for a full dungeon run, so you can buy more and play more, etc. That is why it is not pointless for all players.
Mon, 04/25/2011 - 23:34
#11
So let's say I took the
EDIT: First part based on an incorrect assumption of their methods. Ignore this... (though don't do this still obviously)
So let's say I took the market values that I just took 5 min ago:
Willing to buy 100ce for 3910 crowns
Willing to sell 100ce for 4040 crowns
Now if I put my 10,000 crowns (and 0 ce) into this scheme for a go-around, this would happen:
Crowns/CE (action)
-----------------------
10000/0
-4040/+100 (buy ce from seller)
5960/100
+3910/-100 (sell ce from buyer)
-78/-0 (2% fee)
9792/0
Wow! I love my profit of -208 crowns!
/end random ignorance
Granted, Leviathan is correct -- it would not be too hard to scheme the weekly or holiday flux. However you may or may not want to be wary of section 6 of the Terms of Service: (Wiki - Terms of Service)
You agree not to do any of the following prohibited actions:
...
14. engage in any behavior that is contrary to the 'spirit of the game' as defined by Three Rings in its sole discretion. This includes the manipulation of the game environment.
While trying to earn money off of earned or bought items is pretty obviously within the spirit of the game, simply attempting to make money on the CE exchange market seems to skirt that line in my mind. And helping others to do so would likely fall in the same spot.
Mon, 04/25/2011 - 22:54
#12
That's a snapshot
@ecliptic, That's a snapshot and a flawed conclusion. Spend like 5 minutes watching the market, and it will be out of equilibrium in favor for a good portion. My experience has been that it's rarely out of equilibrium in the negative direction. My experience, so for whatever that's worth. Also due to the nature of one-up or one crown down bidding, it's going to be more effective for micro transactions. Once you dump x10 or any similar number you create a floor or ceiling that people willing bypass by 1 crown.
Who knows how the devs would view it, but that in my opinion that it is completely w/in the spirit of the game. It's an open market. Do you realize that their are people IRL who spend all day buying and selling commodities doing this exact type thing. Anyhow, there is nothing wrong with buying and selling energy on the open market. Not the least bit immoral or any such. And what? i may be affecting the price of energy by 5-10 crowns for a 20 minute period. Anyhow, most players are playing on some kind of arbitrage. Do you think it is skirting the rules when i buy 30 blue shards for 80 crowns apiece, with no plans of doing anything but selling them at 200 crowns apiece?
Anyhow, i think ultimately, this is how a market is designed to work. This is exactly how supply equals demand. This is the spirit of market equilibrium.
BTW worst case scenario (long term) on this is that when you go to buy/sell and the sell price is 2% higher than the buy price. Which is equilibrium.
Mon, 04/25/2011 - 22:59
#13
Uh, that's not quite how it
Uh, that's not quite how it runs, Ecliptic. Look at the actual bids, rather than the instant hits.
....
1) You put in 10 offers to buy 100 CE for 3970 or so. You wait. One or two people who bought CE cash a bunch in, and that rolls down the lists of offers, picking up your 10 offers.
2) You now have 1000 CE. You put it up for sale at 4075c. You wait. That market does the up-and-down shuffle, and your CE eventually sells. This doesn't net you 40750c, though - the tax comes in at about 80c per block. So, 39950c hits your bank.
3) You just spent 39700c, and gained 39950c. A profit of 250c, in.... However long it took for those two transactions to go through. Which means that if the market is cooling or heating, and you're holding the wrong thing, the "however long you need to wait" could be a long, long time. Be told.
4) Rinse, repeat, repeat, repeat. Then, unless you're really good at it, close the window, and ask yourself why you bothered - you could have just run a bloody tier in that time, and made more coin.
....
As for the "spirit of the game" argument, I don't really see it, myself. We have hoarding and hawking, speculating on items and charging all the market will bear on materials. If these activities are all within the spirit of the game, why wouldn't this be?
The main effect of it is to make the market itself adjust more quickly to supply and demand, which is hardly harmful to other players or manipulative.
Mon, 04/25/2011 - 23:01
#14
Just for fun
@ecliptic,
buy price 3910
sell price 4040.
so you buy at 3910 sell at 4040 is a revenue of 130 crowns. The man (three rings) takes 2% of your 4040, so that's an expense of 81 crowns when rounding up.
Revenue of 130 minus expense of 81=profit of 49 crowns.
Note: that by doing this i am creating a crown sink every time which theoretically benefits OOO. Sort-of.
Mon, 04/25/2011 - 23:36
#15
Okay. I understand you are
Okay. I understand you are doing this by making offers. I thought you were claiming that the instant transaction would net you money. I apologize for being an idiot. I see no flaw in your money making plan now, except it seems a touch more egregious to me. For some reason "extra" market listings seems less in the spirit than simply agreeing to "extra" listings. Perhaps my real problem is that this extra crown sink is coming from instatraders; sure they are just being impatient, but they might not be happy to know that others are making money just from how impatient they are. (EDIT: Also many of them are noobs who don't know any better, depending on if that matters to you.)
Anyway, it's your playstyle. I don't mind that you or others do this; I just wouldn't myself. And I always post my own listings, so you won't get my crowns. ;)
Also, if I am observing this correctly, it seems, ironically, that you would destroy your own market over time. Your listings increase the trade competition, which gradually pushes prices "inwards" (towards an even exchange rate for buying and selling). Eventually your profits would slip under the transaction fee. Of course, that's in a vastly simplified view of the economy, and despite the prevalence of such oversimplified SK-economy theories here on the forums, they rarely play out as one expects.
Mon, 04/25/2011 - 23:50
#16
I would be so much more
I would be so much more enthusiastic about this game if economy played a role of actual gameplay. What I mean is having a live feed system similar to the stock exchange marketing. Things like showing the value of CE, CR, specific weapons and mats on some kind of ticker ingame. It sounds farfetched, but I think it would be fun.
Mon, 04/25/2011 - 23:58
#17
"Perhaps my real problem is
"Perhaps my real problem is that this extra crown sink is coming from instatraders; sure they are just being impatient, but they might not be happy to know that others are making money just from how impatient they are."
Hence why I was happy to post to this thread, when I realized that this hadn't occurred to most people. Keeping stuff like this quiet is no good; it's like having an "elite secret". And that bothers me. Better that everyone have the choices:
1) Insta-sell/buy. Get maybe 10, maybe 40 less coins per 100 energy than you could have, or the reverse.
2) Place your own bid. Get the right price... Eventually.
3) Bid both sides, and by the nature of the competition, close what would be a 100-crown gap between option 1 and 2 down to maybe 40 (which is a rockin' profit), maybe 10 (if competition is fierce).
....
Popularizing the idea might put more people into it, which can reduce that 40-crown gap to more like ten... And also maybe let a few new folks know that, hey, option 2 is often a good plan.
If it stiffens up the competition? Fine by me, too.
Tue, 04/26/2011 - 00:47
#18
>but they might not be happy
>but they might not be happy to know that others are making money just from how impatient they are.
if they were, no one would be insta trading...
This playing the market thing actually closes the gap between buying and selling price slightly, by creating slightly closer to each other offers, benefitting insta purchasers.
Tue, 04/26/2011 - 00:47
#19
Playing the martket
You do realize people like you are the only reason the energy market is ruining the fun for a lot of players, don't you?
Tue, 04/26/2011 - 00:48
#20
@Tysta:
Because he's
@Tysta:
Because he's effectively lowering CE prices be removing crowns from the system and lowering the gap between buying and selling price?
I just dont see the logic
Tue, 04/26/2011 - 00:52
#21
He isn't lowering the prices.
He isn't lowering the prices. Out of all attempts he makes only a few will actually lower the price. In the mean time all the 'competition', who are doing the exact same thing, will just drive the prices up and up.
Tue, 04/26/2011 - 01:03
#22
Do explain how. And if your
Do explain how.
And if your explanation start with, "It drives prices up", then walk through it again, and note the following:
1) When someone buys CE with crowns, they tend to buy it one small bit at a time.
2) When someone sells CE for crowns, they often unload a lot at once.
3) Thus, it's okay when doing this to be second-best on your offer with crowns to buy CE, but the competition is tougher on selling CE - because it goes slower.
4) This means that the competition, where it pushes, pushes the cost of CE, in crowns, downward.
When you go to buy CE with crowns, it's a tiny bit cheaper because of the way this contest is rigged. And the insta-buy is a lot closer to fair because people doing this are all undercutting each other, all the time, to offer you better deals.
If that actually ruins your fun, do tell me how.
If it's just "you're doing something complicated with money, and therefore you are the devil", then never mind. I can't reason you out of a position you didn't reason yourself into in the first place.
EDIT: For clarity. Some of that was confusingly phrased.
Tue, 04/26/2011 - 01:59
#23
Thanks Everyone =]
Omg you guys are great, i am writing an essay on this topic, for one of my subjects, your views on the matter is really helpful
I hope this page dun get deleted =p
Tue, 04/26/2011 - 05:33
#24
Economics 101
I posted this in another thread, but I'll go into more detail here if you guys don't mind.
Firstly someone said: "Popularizing the idea might put more people into it, which can reduce that 40-crown gap to more like ten... And also maybe let a few new folks know that, hey, option 2 is often a good plan."
I want to point out that this is mostly false. Even if 100% of the people did arbitrage methods on CE, there is a 2% cut from crowns for every transaction...this 2% causes an almost required gap of at least 80 crowns (if the buy/sell midpoint is 4,000 crowns). If the market were to ever "enter" this gap, then it would sway (either the buy would drop, or the sell would raise) -- it is economic repulsion. You can see this in the real world stock market as well, there is a broker gap (very small, only about 0.5% on daytrading, or possibly even less, depending on volume) because it costs $X to do a transaction, so it's only profitable for a person to buy/sell across this $X gap. Even if it's not guaranteed money, it is the illusion of that profit money that causes the gap.
How it all works
Players with money will purchase CE from 3R. Those players will either sell their CE on the market, or use their CE to play for crowns. When CE is put on the market, it becomes supplied and the price falls (in a situation of no demand, this price could plummet to 0 crowns). Players with crowns who are in need of CE in order to play will purchase it from the market, which increases demand and the price raises (in a no supply situation and with enough time, this price could reach infinite).
Think of those 2 situations like a game of tetris (simplistic tetris using a 1x1 block and a 2 width screen). As people supply the market, a block is able to be moved into a spot (and if a line is made, it disappears). As the demand increases, that's similar to the level being pushed up and a block is randomly placed in 1 of the bottom 2 spots (leaving a gap). The "price" would be the level of the highest block on the screen, and if you watched for awhile, you'll notice the price fluctuate rapidly (an influx of supply would rapidly drop blocks and drive the price down dramatically, while no supply would raise up the level quickly).
If it weren't for arbitrage, not only would it be difficult for you to keep up with the price changes....but it would quickly rise without end (due to the freedom of crown earnings through ME while the demand is constantly increasing). Arbitrage hinders this rising by doing 3 things (in comparison to our analogy of tetris):
1. deflating the crowns in the game (through the 2% cut)
2. slowing down the rising level
3. spanning out the supply more evenly across time
This allows the price to settle into a much closer range that stiffens the rubberband effect. Over time, as people begin to get into the higher tiers, this price will eventually increase, but much more slowly as compared to if arbitrage was not allowed (if somehow purchasing CE from market turned into a middle-ground energy and couldn't be resold for example -- the price would be probably reaching 50kcr and nonstop increasing). At the moment, this gap seems to be from 3900-4100 crowns (when it reached close to these values, the volume sold in that position was way more than supply/demand could account for, these are economic roadblocks in a sense).
There's a lesson for you guys....oh, and by the way, I read we might be getting an auction house at some point. This will be a HUGE tipping point in the CE market, I forecast a rise in the rates (as people are able to efficiently sell their items, crowns will flow much faster, including into the hands of those who demand energy to get more items). This rise will probably happen near (or even before) the AH comes into action due to a lot of economists forecasting (they will hoarde the CE more, which raises the demand).
If any fellow economists would like to chat, in-game name is the same.
Tue, 04/26/2011 - 05:59
#25
hi
@sabriath,
i think you misunderstood this:
"Popularizing the idea might put more people into it, which can reduce that 40-crown gap to more like ten... And also maybe let a few new folks know that, hey, option 2 is often a good plan."
He meant that the arbitrage profit will be pushed from it's current amount to like 10. He was referring to the crown gap after the 2% was taken out. He obviously (judging by his posts) understands that the equilibrium is when WTB is 2% less than WTS.
And i somewhat agree with you about CE going up when/if an AH is added, but i'm not sure how great of a change we actually will see pre-patch, just because a lot of mats are just gonna have such a huge supply. I have tons of great items that i'll throw on the AH that i simply don't have the desire to spam in tradechat.
Also, if they release new equipment with the same patch, suddenly people who had no use for crowns and hoarding CE may dump some CE back into the market.
no longer @sabriath
On a random note, it will also be interesting to see which items aren't as rare as we thought/believed. And it seems strange to me that so many players pay such high prices for some items--like getting 2.5-3k for 2 owlite feathers--when they could just do a dungeon run to get them+a ton of other mats+crowns.
Tue, 04/26/2011 - 07:40
#26
@jeburk
> Also, if they release new equipment with the same patch, suddenly people who had no use for crowns and hoarding CE may dump some CE back into the market.
True, my forecast was only half-shown....I was forecasting when/if the AH comes out, that CE is going to be hoarded which will raise the value. However, as items hit the AH, and the market finds the equilibrium for the items, people will put that CE back on the market, dropping the price. It's going to be one heck of a hump....it'll be ruthless, it'll be a madhouse, it'll be like working the pit in a stock exchange....it'll be glorious (for those who like that stuff)! I can't wait honestly.
Tue, 04/26/2011 - 09:23
#27
Three rings would most likely
Three rings would most likely not be against this, because it removes crowns from the system (in the form of transaction fees), lowering inflation and acting as an unintentional money sink.
That said, I don't bother doing this because the gains are too small.
Tue, 04/26/2011 - 09:44
#28
"He meant that the arbitrage
"He meant that the arbitrage profit will be pushed from it's current amount to like 10. He was referring to the crown gap after the 2% was taken out."
Yes.
But, er, I should have been clearer anyway.
WHY WOULD YOU POST THIS?!