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Margin Trading
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Khahlien Cyrille
Imperial Academy
Amarr Empire
#1 - 2014-06-09 17:05:20 UTC
There's something suspicious that I wanted to look into so I have a question: If you have the Margin Trading skill (at this point, level doesn't matter) and put down a lower escrow, then what happens if someone attempts to fill the buy order and you don't have enough isk on hand to pay? Does the order just disappear when someone else tries to fill it? or is the person who placed the buy order that they can't pay for penelized in some way?
Thx
Elizabeth Norn
Nornir Research
Nornir Empire
#2 - 2014-06-09 17:41:06 UTC
The order is cancelled, you keep your money, but lose the broker fee, the seller keeps their item(s) and gets no ISK. There are no penalties.

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Khahlien Cyrille
Imperial Academy
Amarr Empire
#3 - 2014-06-09 18:36:17 UTC
Except if the other party is using the technique to bait you into buying what they have on sell orders to take advantage of that amazing buy order 'Market Mistake' that's theirs (and that they so kindly posted for everyon to see) as well but with not the whole amount for the buy. So, you end up buying but not be able to sel back the module.
I know I should be more aware of scammers but I didn't even know that such a thing is possible. I really think that this is one exploit that CCP should plug some how. For instance, maybe not being able to post a buy order for a higher price in the same area of 'effect' than you already have a sell order for less. I know the premise behind the skill Margin Trading but I seriously doubt that CCP would intend for anyone to abuse it.
For example; Post 2 sell orders ( 2 @ 940,000,000) then post a buy order ( 2 @ 1,900,000,000 each with a minimum volume of 2) with no money to back up buy, all in the same station.
Jur Tissant
Garoun Investment Bank
Gallente Federation
#4 - 2014-06-09 19:17:33 UTC
Khahlien Cyrille wrote:

I know I should be more aware of scammers but I didn't even know that such a thing is possible. I really think that this is one exploit that CCP should plug some how.


I saw a CCP sticky addressing this issue but I can't recall where. Lots of people will give you the usual HTFU treatment but it's not reasonable that the game interface will effectively lie to you. It'd be like getting Concorded with your safety on green.

Either way, if it sounds too good to be true, it is too good to be true. This is the case 99 out of 100 times.
HeXxploiT
Doomheim
#5 - 2014-06-09 19:26:31 UTC
Khahlien Cyrille wrote:
Except if the other party is using the technique to bait you into buying what they have on sell orders to take advantage of that amazing buy order 'Market Mistake' that's theirs (and that they so kindly posted for everyon to see) as well but with not the whole amount for the buy. So, you end up buying but not be able to sel back the module.
I know I should be more aware of scammers but I didn't even know that such a thing is possible. I really think that this is one exploit that CCP should plug some how. For instance, maybe not being able to post a buy order for a higher price in the same area of 'effect' than you already have a sell order for less. I know the premise behind the skill Margin Trading but I seriously doubt that CCP would intend for anyone to abuse it.
For example; Post 2 sell orders ( 2 @ 940,000,000) then post a buy order ( 2 @ 1,900,000,000 each with a minimum volume of 2) with no money to back up buy, all in the same station.


Yes, this is well known among traders but most people don't discover how it functions until they either train the skill themselves or end up suckered into a scam. Part of the problem is that even if one is aware of how real world margin trading works they are still at risk because the game mechanic has the penalty reversed from what would occur in a real world margin trading scenario where the borrower pays the penalty and the seller is never even aware of the transaction.
CCP has stated only recently that they are looking at some form of modification/critique of the mechanic but no hints as to what that may be.
Luca Lure
Obertura
#6 - 2014-06-09 20:41:19 UTC
Just check the price history.

――――――――――――――――――――――――――――――――――――――――――

The essence of the independent mind lies not in what it thinks, but in how it thinks.
Zero Sum Gain
Center for Advanced Studies
Gallente Federation
#7 - 2014-06-09 20:52:59 UTC
Yes this is what the scanners is local are doing when you see 'omg look at this someone must've misplaced a decimal! if only I had the risk to buy it'

Its usually a seldom traded item though with zero competition.
Khahlien Cyrille
Imperial Academy
Amarr Empire
#8 - 2014-06-09 21:09:33 UTC  |  Edited by: Khahlien Cyrille
Thx all. You're all right about this; I just wasn't aware how backwards it was. I feel like such an idiot. Really believed that someone had made that big of a mistake. Then found out that I had just bought the items from the same exact person that pointed out the 'Market Mistake'. Oh well. but it was a VERY expensive lesson. But now I know what that skill is for. Hadn't trained it thus far because I couldn't see a use of putting a buy order that you couldn't completely pay for. Now I know that (with no penalties incurred) you can lure people in for any number of scams (I can think of a few now) or put up a bunch of buy orders with no responsibility to fill the order if you can't or don't want to. Isn't that taking the phrase "Buyer Beware" a little too far.
Ugh
voetius
Grundrisse
#9 - 2014-06-09 21:27:19 UTC
Khahlien Cyrille wrote:
But now I know what that skill is for.


The Margin Trading skill is "for" exactly what it says in the description. The Margin Trading scam is quite an inventive use of the skill that has put CCP in a difficult spot because they can't find a way to stop ppl scamming using the skill without removing it completely.
Khahlien Cyrille
Imperial Academy
Amarr Empire
#10 - 2014-06-09 21:55:18 UTC  |  Edited by: Khahlien Cyrille
voetius wrote:
Khahlien Cyrille wrote:
But now I know what that skill is for.


The Margin Trading skill is "for" exactly what it says in the description. The Margin Trading scam is quite an inventive use of the skill that has put CCP in a difficult spot because they can't find a way to stop ppl scamming using the skill without removing it completely.



LOL..very inventive. Idea
Thx everyone. I'll just go back to doing what I was before: Research my markets and stick with the ones I know. I make plenty of ISK that way. Now I have to go and work extra hard to make up for trying to take the 'easy road'. Shocked


Can close now. thx
O'nira
Science and Trade Institute
Caldari State
#11 - 2014-06-09 21:58:08 UTC
ccp wants to remove the way scamming with the skill works but they can't figure out a way to do it without breaking the skill for people who use it legit.
Adunh Slavy
#12 - 2014-06-10 00:20:36 UTC
O'nira wrote:
ccp wants to remove the way scamming with the skill works but they can't figure out a way to do it without breaking the skill for people who use it legit.



Even though I have spent the time to train it to level five myself, IMO, CCP should get rid of the skill.

There is no reason NPCs should give out, what is in effect, zero interest rate loans, to players. Instead, a new type of contract that has a long duration, that can use anything for principle, anything for maturity, anything for coupon and can be auctioned with an originating minimum bid and resold at any time before maturity.

NPCs should not be involved in setting the price for capital, much less setting it a zero percent interest.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt
Hel O'Ween
Men On A Mission
#13 - 2014-06-10 16:23:10 UTC
Adunh Slavy wrote:
There is no reason NPCs should give out, what is in effect, zero interest rate loans, to players.


It's nowhere near a loan.

If it were, the exact scam you're talking about would not work, because the player selling stuff would receive the money (from the loaning NPC) and would put the scammer's wallet "in the reds" (towards the loan-giving NPC).

EVEWalletAware - an offline wallet manager.
Korgan Medel
Brutor Tribe
Minmatar Republic
#14 - 2014-06-10 16:26:26 UTC
CCP should not get rid of the skill, It would decimate the liquidity of the markets.

The con is what it is, When I first saw it I looked all over and managed to pick up the same item from 20 jumps or so away and sold it a hundred or so mil cheaper making a killing.
Silvetica Dian
Imperial Shipment
Amarr Empire
#15 - 2014-06-11 00:03:27 UTC
Khahlien Cyrille wrote:
Except if the other party is using the technique to bait you into buying what they have on sell orders to take advantage of that amazing buy order 'Market Mistake' that's theirs (and that they so kindly posted for everyon to see) as well but with not the whole amount for the buy. So, you end up buying but not be able to sel back the module.
I know I should be more aware of scammers but I didn't even know that such a thing is possible. I really think that this is one exploit that CCP should plug some how. For instance, maybe not being able to post a buy order for a higher price in the same area of 'effect' than you already have a sell order for less. I know the premise behind the skill Margin Trading but I seriously doubt that CCP would intend for anyone to abuse it.
For example; Post 2 sell orders ( 2 @ 940,000,000) then post a buy order ( 2 @ 1,900,000,000 each with a minimum volume of 2) with no money to back up buy, all in the same station.


only an idiot would fall for that.
the weakest are always culled from the herd and the predator and the herd both benefit from this.

Money at its root is a form of rationing. When the richest 85 people have as much wealth as the poorest 3.5 billion (50% of humanity) it is clear where the source of poverty is. http://www.theguardian.com/commentisfree/2014/jan/20/trickle-down-economics-broken-promise-richest-85
Adunh Slavy
#16 - 2014-06-11 01:48:02 UTC
Hel O'Ween wrote:
Adunh Slavy wrote:
There is no reason NPCs should give out, what is in effect, zero interest rate loans, to players.


It's nowhere near a loan.

If it were, the exact scam you're talking about would not work, because the player selling stuff would receive the money (from the loaning NPC) and would put the scammer's wallet "in the reds" (towards the loan-giving NPC).


I am not addressing the simple surface matters of the margin trade skill or the silly scam, I am pointing to the market distortion caused by this skill.

It is a loan in the fact that a player can make market expressions larger than their wallet would otherwise allow. The player gets to have these positions interest free. The margin call does not occur until the time of the transaction. So, a player can express capital he does not have. To do that in a real world, you get to pay interest.

How much of the market bids are backed by absolutely nothing? Quite a bit I would suspect. The market is bid up beyond what would be otherwise possible.

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.  - William Pitt
HeXxploiT
Doomheim
#17 - 2014-06-11 18:13:21 UTC
voetius wrote:
Khahlien Cyrille wrote:
But now I know what that skill is for.


The Margin Trading skill is "for" exactly what it says in the description. The Margin Trading scam is quite an inventive use of the skill that has put CCP in a difficult spot because they can't find a way to stop ppl scamming using the skill without removing it completely.


Oh there's an easy way to assist the problem that's quite fair. Simply make it so that if an order goes through that the buyer cannot fill then ALL the buyers orders are instantly cancelled along with the failed order along with an isk penalty for failing to compensate an order. This would be enough of a discouragement that all but the most dedicated scammers would not engage in this practice.
Careby
#18 - 2014-06-11 20:33:56 UTC
Khahlien Cyrille wrote:
... I know the premise behind the skill Margin Trading but I seriously doubt that CCP would intend for anyone to abuse it...
HeXxploiT wrote:
... CCP has stated only recently that they are looking at some form of modification/critique of the mechanic but no hints as to what that may be.
O'nira wrote:
ccp wants to remove the way scamming with the skill works but they can't figure out a way to do it without breaking the skill for people who use it legit.


"Watch what they do, not what they say."

The scam has been around for a long time. CCP has been aware of it for a long time. If CCP didn't want margin trading scams in the game, they would not be in the game.
Barakach
Caldari Provisions
Caldari State
#19 - 2014-06-12 17:02:05 UTC
While they can't stop the scam, they could add a simple UI change to indicate that the buy order does not have enough money to back-up the (minimum quantity * price per unit)

Sell order for 10 units of 100mil each

Buy order for 10 units for 150mil each with a minimum of 10 units. But the character's wallet for the buy order doesn't have 1.5bil to cover, so highlight the buy order red, or something.
Nate Guralman
Pator Tech School
Minmatar Republic
#20 - 2014-06-13 18:58:12 UTC
Adunh Slavy wrote:
It is a loan in the fact that a player can make market expressions larger than their wallet would otherwise allow.


That's incorrect. The player gets nothing for the money he/she puts upfront. If you want to compare it to something, it's more like a deposit:: you put a percentage of the value of the item upfront, and when the item becomes available, you then put up the full amount of the bid before you actually get the item in your possession.

In RL, a margin trade would be a loan, because you actually get the security for a portion of the money you put in. For example, you can buy $10,000 worth of shares for $5,000, and you actually get the securities as soon as you put up that $5,000, effectively borrowing the remaining $5,000 you need to purchase the security.

In EVE, you don't get the item when you put up the buy order, you only get the item when pay the entire bid amount for it. In fact, Margin Trading in EVE is costing you money, since the escrow you put up for bids is locked up, not doing anything, while you wait for someone to fill that buy order.
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