Spiral Knights - Is CE market manipulation that big a deal?

Is CE market manipulation that big a deal?

8 replies [Last post]

Tue, 06/14/2011 - 15:33

Majikos

Looking at the Marketplace tab of the Energy Depot, there are (at time of writing) 27 bids to buy energy at 6650 CR per 100 CE, and only a handful of bids above and below that price. Meanwhile there are 47 bids offering 100 CE for 6930 CR.

I am informed that this a clue that someone is doing a bit of CE market manipulation. I'm probably a bit late to the party with this information, as I've not really taken much interest in the CE market up to now and I'm having a hard time understanding how it works.

In any case, the general idea (so I am informed) is to drop a whole load of spurious bids on the market with the goal of establishing "price walls" (I'm kind of hazy as to how this actually works) that push apart the buy and sell prices for CE. The aim is to fix it so that the top offer to buy CE (which is what's displayed on the Trade tab) is less than 98% of the top offer to sell CE. So... basically people wanting to buy CE in a hurry look at the Trade tab (which shows the current top offer to sell CE), pay that rate, and the manipulator then puts the proceeds from that sale into a bid to buy more CE, but at the lower rate in the "top offers to buy" column of the Market tab. This CE is then once again offered for sale at the Trade tab rate.

This is... kind of sneaky. It also seems kind of like a giant waste of effort, given that pushing the prices apart like that involves fighting against a marketplace full of people willing to undercut your bids, and even if you do succeed it seems like you'd only reap a handful of CR each time, once the 2% fee has been deducted.

So are these market manipulators really an issue? Do they have any kind of impact beyond the relatively short windows of time in which they're active? Are their attempts to game the system really worth it? Is the payoff better than you could get from, say, spending the time doing some Clockworks runs on ME? It occurs to me that actually they're acting to curb inflation by pouring CR into the 2% CE sale fee each time they ply their dubious trade. Interesting thought.

Incidentally, in the time it's taken me to write this post the 27 bids to buy energy at 6650 CR have disappeared - I caught the last dozen or so being cancelled one after another, which implies the manipulator has stopped for now.

Tue, 06/14/2011 - 15:49

Cobaltstarfire

"It also seems kind of like a

"It also seems kind of like a giant waste of effort"

Well maybe to you, and I don't say this specifically in relation to manipulation if it's going on, but buying and selling on the CE Market at all, that 2% of CR over time will grow very quickly if you are a canny player for that sort of thing because the resources you have on hand expand with each buy/sell, to be put back into making more. I don't bother with it because I don't have the mind for it, but I know a few people who have made a big profit in both CE AND Crowns simply by buying and selling smartly. I've asked these people what they think of the market manipulation, and it doesn't particularly bother them (they worry a bit for new players when it goes real high, but they know it'll read djust back down to an equilibrium eventually)

Tue, 06/14/2011 - 16:08

Majikos

@ bluestarfish

The 2% figure is what's lost in the transaction - CE sellers are charged a 2% sales fee on their transactions.

Say someone buys 100 CE for 1000 CR (keeping the numbers simple). If they then wanted to make a profit selling it on, they'd need to sell it for at least 1020 CR, so they'd still get 1000 CR or more after the 2% fee was deducted. If they just sold it for 1000 CR they'd only get 980 CR after the fee.

Buying CE at one price and waiting for the price to rise so you can sell it at a profit is more speculation than manipulation. It's a gamble. The kind of behaviour that deliberately atttempts to distort the market prices is more dubious, I think, and people are generally pretty disapproving of it.

To give some idea of the numbers involved, if someone bought 100 CE at 6650 CR, they'd need to sell it for at least 6785 CR in order to get their investment back. While I was watching, the CE sale price was around 6800 CR or so, which would net the manipulator the princely sum of... 14 CR per transaction.

There's got to be better ways of making money.

Tue, 06/14/2011 - 16:43

Wire

Legacy Username

Not sure what the complaint is

I'm not sure what's sneaky about it nor what's manipulative about it. If the offers to buy and sell are more than 2% apart there is easy money to be made. Nothing is being manipulated. Nothing is sneaky about it.

As for whether it's worth it, I frequently realize a profit of 50-75 per transaction.

Wed, 06/15/2011 - 01:31

Majikos

@ Wire

The sneaky and manipulative part is setting up "walls" to artificially push the prices that far apart. I'm pretty sure that whoever placed 27 identical bids or 47 identical offers wasn't interested in actually trading that much CE, but rather pushing the prices in a direction that would profit them. Left to its own devices the market finds an equilibrium. Manipulation distorts things.

Wed, 06/15/2011 - 03:31

gell

Legacy Username

You do realize that if you

You do realize that if you see 27 bids that this is necessarily one person, right? I've put up 5 bid for 6500 before, and there were 30 others. This made a total of 40 bids. Not always one person putting up all the bids.

^ note that's an example I don't do anymore, as nice looking round numbers are extreme popular for people to place bids at. Better for me to bid higher or lower than it.

That doesn't mean there aren't people who don't try to artificially move the market. Sometimes 50 bids will appear for one fat round number all of a sudden, but that actually happens less often than random players just putting up mass bids in general and picking round numbers to go with.

Wed, 06/15/2011 - 03:40

Majikos

@ gell

I'm pretty sure they were just the one person, as they were cancelled while I was watching. They went from 27 to 0 in a few seconds.

Wed, 06/15/2011 - 04:23

gell

Legacy Username

Is that really manipulation

Is that really manipulation though, or is it someone trying to make a buck? There's a difference. As Wire said, when there's a gap in prices, you can take advantage of that and put up bids on both sides. People will buy your energy and others will buy your crowns. You end up with the same energy and more crowns. Sometimes you might not think it's profitable anymore and hit cancel on your whole lot. Manipulation? Hardly, it's a free market.

There are manipulators, but they tend to push things up a few hundred cr at once. Your example failed to show me anyone was manipulating anything, just someone trying to make a quick buck and canceling bids because maybe they felt the bids would not get snatched up, or someone outbid them.

Wed, 06/15/2011 - 04:37

Algol-Sixty

I have seen "walls" of >100

I have seen "walls" of >100 offers walked right through, and I've seen "walls" of 1 be outbid, as if they were huge.

If the market is marking in one direction, there is very little that can stop it. Stop paying attention to trolls who claim they have magical powers.

Again, you have to remember that the only people who are filling the buy orders on the "complex" market screen are people who push the "buy crowns" button on the simple trade screen. Let that point sink in. The simple trade screen and the orders placed via the market screen aren't just two interfaces to the same market, but they actually serve different functions and the number of times someone presses the "buy crowns" button has to almost exactly match the number of orders placed via the market screen. If, in the long term, there was even slightly more people pressing the "buy crowns" button than there are orders placed on the market, eventually all the offers would be gone and the "buy crowns" button wouldn't work.

This is where you are likely to see most of these "market walls". They are arbitrage traders who place lots of bids for both buying and selling CE. When the top offer to buy 100CE is more than 2% lower than the top offer to buy 100CE, traders can make a profit by buying and selling. Not only are they making a profit, which obviously helps them, but they are helping the game by balancing out the number of 100ce bundles traded via the simple "buy now" button and the order screen.

Yes, there are people who claim to have moved the market significantly via market walls. They are trolls. Unless they actually trade significant amounts of CE (and a few have), the others have just move the market in the direction it is going. It is like someone who splashes washes water downstream and claim they made the river.

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Is CE market manipulation that big a deal?