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Skill: Margin Trading. How important is it?

Author
Damzk Raholan
Viziam
Amarr Empire
#1 - 2015-02-22 11:23:03 UTC
Hi there.

I posted something a while ago about how to scale up your station trading business. Now i'm here (still station trading) asking another question. How important do you feel the "Margin Trading" skill is?

Let me give you an example. Sure, I can see how margin trading would be very effective if you have sell orders up in backwater systems covering massive amounts of space buying volumes from lazy players. You put up your buy order, check it once a week or every few days, you're golden.

But when station trading, how often do you use Margin Trading? This is a genuine question, not a challenge of the norm (if that is even the norm). I can see how beneficial having isk in your pocket is, however, what are the real downsides to using Margin Trading when using the day trading option?

Note, I have 0 levels in Margin Trading and 5 in Accounting/Broker Relations. Is it worth it? Or should I train warehouse/tycoon instead?

Are there any benefits when DAYTRADING to not using margin trading? As in, not putting a lump of isk out there?

My worry is that if you put out 100 orders, or 200 orders, how easy would it be for the market to collapse/shift/you lose your margin (10%) and since you have 100-200 orders to manage, you could easily slip up and miss an item that is currently falling. No? As this does happen, markets do shift.

Thank you for your time.
Luthias Austrene
Brave Newbies Inc.
Brave Collective
#2 - 2015-02-22 11:59:59 UTC  |  Edited by: Luthias Austrene
Personally, I like having margin trading, as long as you keep track of how much ISK is in your wallet vs how much you need to cover. I prefer having at least 50% of the ISK I need to cover in my wallet, but I could probably put that up to 70% or more without too much trouble. It definitely helps when you have less ISK because 1 or 2 failed orders won't matter when you get the profit from the ones that were filled.

You could always train it one level at a time and see if you like it. I haven't got V yet, I don't see the benefit..

EDIT: Also, Warehouse is good. Get both if you're serious about trading.
Ms Sade
Hammertime Holding
Division Nine Alliance
#3 - 2015-02-22 14:28:30 UTC
Markets shift and you can use margin trading to have that low buy order sitting there ready for the bottom to fall out at a reduced escrow...

Depends if that kind of thing interests you


Oh and it's good for diversification....more order up for the same isk in escrow.

HeXxploiT
Doomheim
#4 - 2015-02-22 19:56:50 UTC
More money makes money. The fact is the more capital I have to work with the more money I can make.
If I gave you 10bil isk right now would you be able to make a larger profit then you currently are? If you wouldn't then clearly you've reached the peak of your trading career. Well trading on margin is essentially the same thing as having extra isk.
There really aren't any downsides to margin trading. If not managed properly you can miss out on buy orders but this isn't really a downside since you never had the isk for the product to begin with.

Also understand that margin trading in eve is very different then margin trading in the real world. The term "margin trading" is defined quite differently in the real world and in reality there are substantial risks to trading on margin. It's too bad eve doesn't reflect a more realistic economy in order to weed out the posers.
Sabriz Adoudel
Move along there is nothing here
#5 - 2015-02-23 00:04:11 UTC
I have it to 4.

It's most famous for the scamming applications (which I don't do on this character), but there is basically never a time that I have enough ISK to cover all of my buy orders.

I support the New Order and CODE. alliance. www.minerbumping.com

TheSmokingHertog
Julia's Interstellar Trade Emperium
#6 - 2015-02-23 02:27:31 UTC
Leverage. Do I need to say more?

"Dogma is kind of like quantum physics, observing the dogma state will change it." ~ CCP Prism X

"Schrödinger's Missile. I dig it." ~ Makari Aeron

-= "Brain in a Box on Singularity" - April 2015 =-

The Greenmachine Greenmachine
Green's Bicycle Shop
#7 - 2015-02-23 16:12:46 UTC
have it @ V on several characters... for my evil deeds
MistaPwn
Syrian Seal Cub Clubbing Club
#8 - 2015-02-24 00:56:01 UTC
The Greenmachine Greenmachine wrote:
have it @ V on several characters... for my evil deeds

Yeah Greens got the right idea, It's a must..;)
voetius
Grundrisse
#9 - 2015-02-24 21:30:52 UTC
Damzk Raholan wrote:
Hi there.

I posted something a while ago about how to scale up your station trading business. Now i'm here (still station trading) asking another question. How important do you feel the "Margin Trading" skill is?

Let me give you an example. Sure, I can see how margin trading would be very effective if you have sell orders up in backwater systems covering massive amounts of space buying volumes from lazy players. You put up your buy order, check it once a week or every few days, you're golden.

But when station trading, how often do you use Margin Trading? This is a genuine question, not a challenge of the norm (if that is even the norm). I can see how beneficial having isk in your pocket is, however, what are the real downsides to using Margin Trading when using the day trading option?

Note, I have 0 levels in Margin Trading and 5 in Accounting/Broker Relations. Is it worth it? Or should I train warehouse/tycoon instead?

Are there any benefits when DAYTRADING to not using margin trading? As in, not putting a lump of isk out there?

My worry is that if you put out 100 orders, or 200 orders, how easy would it be for the market to collapse/shift/you lose your margin (10%) and since you have 100-200 orders to manage, you could easily slip up and miss an item that is currently falling. No? As this does happen, markets do shift.

Thank you for your time.


That is the tricky bit. You need to know your markets. If you are trading in e.g. T2 modules in Jita then yes, it's useful as you will be waiting for buy orders to fill and your hardest job will be to beat the other buyers to snag the goods. You would probably want much more isk in buy orders than sells and Margin Trading will help you there.

I have several characters with Margin Trading V but I don't use buy orders that much as I've changed the way I trade recently.
Sabriz Adoudel
Move along there is nothing here
#10 - 2015-02-24 22:37:10 UTC
Even if you don't use buy orders much you definitely will still use them occasionally, so MT 3 is a must. It's a day of training.

I support the New Order and CODE. alliance. www.minerbumping.com

Cixi
#11 - 2015-02-25 10:01:24 UTC  |  Edited by: Cixi
I have it to V on multiple alts and I never failed an order. Margin trading increase your buying power, you will be able to buy more things, faster (by placing BO on more items than you could without it). If you are supplying your orders with buy orders, its a must.

A little rundown how this would work for you :

Without MT :
You place a BO for 100 items @ 10.000.000.
You need to pay 10.000.000 upfront and you get 5 items / day

With MT :
You place a BO for 100 items A @ 10.000.000.
You place a BO for 100 items B @ 10.000.000.
You place a BO for 100 items C @ 10.000.000.
You need to pay 7.500.000 (@25% MT) upfront and you get 15 items / day.

You just need to be sure to have enough money to fill the BO, but this is hardly a problem.
Alex Grison
Grison Universal
#12 - 2015-02-26 16:24:02 UTC
much

yes

SJ Astralana
Syncore
#13 - 2015-02-26 19:57:23 UTC
If you have a positive cash flow margin trading is a no-brainer. It's when you expand your business and have no real way of knowing its impact on short term cash flow while capitalizing it that MT gets... interesting. But as the only downside is loss of broker fees it's not the end of the world if while flying by the seat of your pants you get caught with your pants down.

Hyperdrive your production business: Eve Production Manager

Felicity Love
Doomheim
#14 - 2015-02-27 14:11:27 UTC
Some folks love it and make awesome use of it.

Personally, I never use it. The only ISK that actually matters to me is the ISK in my wallet and/or invested in commodities, products, etc..

"How important" then comes down to your "style" as a trader, meaning is it useful to you?


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