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Lost 1.5 billion on Margin Trading Scam
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Manhim
Garoun Investment Bank
Gallente Federation
#41 - 2013-08-14 17:22:04 UTC  |  Edited by: Manhim
Jonah Gravenstein wrote:
Manhim wrote:
Chris Winter wrote:
IMO, just somehow indicate buy orders that will fail--color them red, or something.


That would be the best thing to do and also the easiest one.

The overhead for that would cripple CCP, every buy order would have to be constantly compared to the current wallet balance of the person who placed the order and the appropriate filter applied to the market.

How do you decide which orders will fail and which ones won't? I and many many other people have multiple buy orders that often exceed our ability, in liquid ISK, to complete if they all came in at once, we rely on our sell orders to provide the liquid ISK to complete those buy orders.


So far I brought up 4 ideas that would fix this topic's issue and I'm pretty sure that any of them would fix the scam part of the issue at least:

- In contracts, show the same value you get when trying to buy or sell something (Warning: This sell order is 9001% higher then the market average, are you sure you want to continue + a warning in the contract before clicking accept) + Add a way to filter orders by minimum quantity

- Show the buy orders from people who cannot afford their current margin in red. (I prefer the first one)

- Remove the Margin Trading skill

- Base the maximum margin on your wallet + sell orders value at market averages, you cannot cancel sell orders until you have cleared your negative ISK wallet and cannot lower the price under the market average. (Most complicated method, fixes everything and is more clear about the real use of margin trading)
RubyPorto
RubysRhymes
#42 - 2013-08-14 17:32:26 UTC  |  Edited by: RubyPorto
Manhim wrote:
So far I brought up 4 ideas that would fix this topic's issue and I'm pretty sure that any of them would fix the scam part of the issue at least:


What issue? What's the game mechanical problem with people choosing not to research the value of items they choose to invest in?

Quote:
- In contracts, show the same value you get when trying to buy or sell something (Warning: This sell order is 9001% higher then the market average, are you sure you want to continue + a warning in the contract before clicking accept) + Add a way to filter orders by minimum quantity


Right click > Show market details. The information you're asking for is already there.

Quote:
- Show the buy orders from people who cannot afford their current margin in red. (I prefer the first one)

- Remove the Margin Trading skill


What information does having 90% of orders in Jita being marked red provide? Not having to be able to cover all your orders at once is the entire point of the skill.

Why do you want to make trading significantly harder for newer players who don't have tens or hundreds of billions of ISK to throw around?

Quote:
- Base the maximum margin on your wallet + sell orders value at market averages, you cannot cancel sell orders until you have cleared your negative ISK wallet and cannot lower the price under the market average. (Most complicated method, fixes everything and is more clear about the real use of margin trading)


Wheeeeeeeeeeeeeeeeeee! Infinite ISK fountain. Taking ISK out of an empty wallet and putting it into another wallet is immediately gamebreaking. Which is why the Margin Trade skill has very little to do with the RL activity of trading on margin.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Jonah Gravenstein
Machiavellian Space Bastards
#43 - 2013-08-14 17:33:37 UTC  |  Edited by: Jonah Gravenstein
Manhim wrote:

So far I brought up 4 ideas that would fix this topic's issue and I'm pretty sure that any of them would fix the scam part of the issue at least:

- In contracts, show the same value you get when trying to buy or sell something (Warning: This sell order is 9001% higher then the market average, are you sure you want to continue + a warning in the contract before clicking accept) + Add a way to filter orders by minimum quantity
This is already possible, it's called looking on the market, although most margin trading scams use items that are rarely if ever traded on the market so the hook will often be the only buy order. In which case the "eleventybillion % over average" would become moot, no trades = no average.

Quote:
- Show the buy orders from people who cannot afford their current margin in red. (I prefer the first one)
Overhead, as previously metioned.

Quote:
- Remove the Margin Trading skill
No, why should the vast majority of legitimate traders suffer because someone was dumb enough to fall for a scam?

Quote:
- Base the maximum margin on your wallet + sell orders value at market averages, you cannot cancel sell orders until you have cleared your negative ISK wallet and cannot lower the price under the market average. (Most complicated method, fixes everything and is more clear about the real use of margin trading)
Once again the overhead would be ridiculous, it would also require a complete rewrite of the market section of the game, if you have a negative wallet you can't sell anything at all, because you can't pay the fees and taxes involved in doing so. Having a negative wallet is currently usually a big fat red flag imposed on a character by CCP for RMT, changing the system so that trading puts you in that situation would make that flag less meaningful.

edit - Thanks to RubyPorto for the info regarding customs fines also being able to give you a negative balance, my point however remains

In the beginning there was nothing, which exploded.

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Feyd's Survival Pack
RubyPorto
RubysRhymes
#44 - 2013-08-14 17:36:15 UTC
Jonah Gravenstein wrote:
Having a negative wallet is currently a big fat red flag imposed on a character by CCP for RMT, changing the system so that trading puts you in that situation would make that flag less meaningful.



To pick nits, you can also go negative due to Customs fines.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Jonah Gravenstein
Machiavellian Space Bastards
#45 - 2013-08-14 17:38:47 UTC  |  Edited by: Jonah Gravenstein
RubyPorto wrote:
Jonah Gravenstein wrote:
Having a negative wallet is currently a big fat red flag imposed on a character by CCP for RMT, changing the system so that trading puts you in that situation would make that flag less meaningful.



To pick nits, you can also go negative due to Customs fines.

I thought they'd kind of fixed that by improving the dialogue so that people knew to eject their contraband when collared by customs for smuggling, but TY for the info, edited my post accordingly.

In the beginning there was nothing, which exploded.

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Feyd's Survival Pack
Andski
Science and Trade Institute
Caldari State
#46 - 2013-08-14 17:42:22 UTC
All of the ideas in this thread regarding that skill are terrible.

For one, filtering out buy orders from the market window if the buyer lacks the funds to fully cover it adds a ton of database transactions to a single market query. Go to Jita and look at the orders for any given item, especially a common one, and there will be a ton. Even if only the ones placed by a character with that skill trained are flagged for a wallet check, that skill isn't uncommon.

Second, forcing the buyer's wallet to go negative just to nerf a scam is absolutely stupid and has worse consequences for the game than a few idiots unsubbing because they lost at market PvP. You're literally asking CCP to add an isk duping exploit intentionally, fat chance.

Third, there are legitimate uses for this skill. There are traders who place buy orders for, say, mission loot in mission hubs which they don't expect to fill quickly, so this skill has the benefit of allowing them to tie down less capital with those orders than they otherwise would. This skill also isn't a problem because it simply doesn't lead to anybody getting something without paying for it.

The only problem arises when it is used in conjunction with overpriced sell orders on obscure items.

Twitter: @EVEAndski

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths."    - Abrazzar
Doddy
Excidium.
#47 - 2013-08-14 17:45:58 UTC
Mocam wrote:
Wrong forum. Crime & Punishment, Market Discussions... Ok but GD?

As for your post - yes this uses a poorly implemented game mechanic. Yes it's been discussed before repeatedly and I imagine CCP will "eventually" get around to addressing the problem.

IMO - treat margin trading like flying a T3 - if the order collapses due to insufficient funds, they lose a skill level and must retrain it.


There is no scam in margin trading, the scam is idots buying useless things for lots of isk.
Cyber SGB
Science and Trade Institute
Caldari State
#48 - 2013-08-14 17:57:32 UTC
It amazes me that EvE Online players ***** and moan about scamming, knowing damn well it is built into the game as a feature.

You know scams are there; it is your fault if you fall for one.

I write Kindle books. Visit my author page. http://amazon.com/author/sgbynum
RubyPorto
RubysRhymes
#49 - 2013-08-14 18:29:27 UTC
Jonah Gravenstein wrote:
I thought they'd kind of fixed that by improving the dialogue so that people knew to eject their contraband when collared by customs for smuggling, but TY for the info, edited my post accordingly.



Why would you eject the contraband when you can just warp off and let your contraband hauling alt dive deeper and deeper into the red?

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Minasheera Jones
Center for Advanced Studies
Gallente Federation
#50 - 2013-08-14 19:20:08 UTC
embrel wrote:
Andrea Griffin wrote:
I'd rather have all buy orders that cannot be covered by the current wallet amount be removed from the market automatically.



and which one would that be?

e.g. 10 open buy orders at 100M each, available liquidity 800M.

Now, which order would you like to see cancelled?

In the above example you can assume that usually the 800M will be sufficient for these open orders. You just drain the market of liquidity cancelling uncovered orders. And why? In order to protect people from their own greed?


Maybe instead of canceling the buy order, all market traded buy orders should be colored differently to indicate there is a risk that the order won't go through?

The problem here is that one of the party in this transaction has insufficient insight to make an informed choice about whether they want to participate in this transaction. In real life I guess the equivalent would be to be able to perform a credit check on a customer before ordering the raw materials for an expensive custom job. Sure, they would still be stuck with the materials at the end of the day but at least they had an inkling of what they were getting into.

And I still don't understand accusing the victim for being greedy when this is the driver of every single market transaction in this game, up to and including the person who set up that buy order in the first place.

TLDR: the balance of information is lopsided in market transactions and there needs to be some indicator that the request might not be fulfilled.

Post script since it took me so long to type this up.
I see a lot of people arguing against any form of indicator on the basis that it's too hard on the database. Seriously, that's CCP's decision to make on how they would implement such a thing.

Victoria Sin
Doomheim
#51 - 2013-08-14 19:35:31 UTC
Margin scam is the scam de jour right now. First time I saw one I thought "Wow, I could clean up!". After a few minutes of thinking about it, I concluded that the guy would see the item bought and immediately cancel the sell contract so I couldn't sell it in time. In fact it's more banal than that: he doesn't have enough to cover it in his wallet.

Probably shouldn't trade after booze.
RubyPorto
RubysRhymes
#52 - 2013-08-14 19:47:06 UTC  |  Edited by: RubyPorto
Minasheera Jones wrote:
Maybe instead of canceling the buy order, all market traded buy orders should be colored differently to indicate there is a risk that the order won't go through?


Any order can disappear from the market at any time for any number of reasons. So, I guess they should all be colored.

Quote:
The problem here is that one of the party in this transaction has insufficient insight to make an informed choice about whether they want to participate in this transaction. In real life I guess the equivalent would be to be able to perform a credit check on a customer before ordering the raw materials for an expensive custom job. Sure, they would still be stuck with the materials at the end of the day but at least they had an inkling of what they were getting into.


In real life, the equivalent would be investing in a 1 room house in the Slums for a million bucks. Then being surprised when you lose money trying to flip it.

And you're not stuck with the materials, you can sell it to the next buy order or put it up on sell orders. Neither option hurts you, since literally nothing has changed in your situation since you tried selling to the buy order. (Any money you lost, you lost when you bought items at 10 times their market value).

The sufficient insight is provided by pressing one button (view market history) to determine the price the item normally trades at.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Darvaleth Sigma
Imperial Security Hegemony
#53 - 2013-08-14 20:10:04 UTC
If it's too good to be true... it is!

Give a man a match and you warm him for a day.

Set a man on fire and he's warm for the rest of his life!
Doc Severide
Doomheim
#54 - 2013-08-14 21:02:50 UTC
I'm actually sitting here in my leather thong right now...

Everyone is always repeating the mantra "Don't Trust Anyone" ad nauseum... If I can't trust the guys I play with, why bother playing with them at all? Fly Solo...
Jayem See
Perkone
Caldari State
#55 - 2013-08-14 21:09:20 UTC
Doc Severide wrote:
I'm actually sitting here in my leather thong right now...


And let me tell you - you are looking particularly good in it.

**disappears with a rustle of bushes**

Aaaaaaand relax.
Liltha
Lost My Way Enterprises
#56 - 2013-08-14 22:16:40 UTC
RubyPorto wrote:
Liltha wrote:
I was under the impression that with real life margin trading you actually had to cover the bill if your sales didn't end up covering your buys when it came due one way or the other. Either through sales of other stock, often at unfavorable prices, or through loss of other assets.


RL trading on margin has very little to do with what EVE's Margin Trade skill does.

RL trading on margin is trading (as in actually buying securities) with borrowed money. That's why there are margin calls, because you're reaching the limit of your credit line.
IRL, you can place an order, and the broker doesn't have to check how much money you have in your account* until the order fills, no skill needed.

*A good broker may check as the clearing price approaches your order, so he can give you a heads up if you're short of funds, but that's just customer service. The brokerage house may also cover your shortfall temporarily (as a loan), again as a customer service.


Yeah, only brought the real life up because the post I quoted had brought it up.

As silly as I find the margin trading scams I don't really want to change the skill, would hurt too many people and causes too many problems without really fixing any as I went on to mention as well. Since the scam version really only affects the greedy that buy items trying to flip them quick I can't find myself too bothered by this issue past a small bit of mirth I would get if said scammers could get assets on other accounts repoed to cover the buy orders hehe.
Alicia Aishai
Perkone
Caldari State
#57 - 2013-08-15 08:46:06 UTC  |  Edited by: Alicia Aishai
A few comments:
There should be some tutorial explaining this "unfunded buy order" mechanics to players. This is a very specific game mechanics to EVE Online and 99.9% players coming from other games wouldn't even suspect such mechanic exists
I'm personally not a big fan of this skills existing. It is clear that it benefits some people but I'm not convinced it benefits the overall market a lot. Aside of the (obvious) scams, it is used by some to manipulate prices of certain items. This is clearly not beneficial for the market.

Nevertheless, assuming the skill stays, there are realistic ways to alleviate the issues:
Example 1
- Most people who are not traders don't have the margin trading skill trained. The buy order of those players will always be funded and good. Such order could appear with a special sign (like a little star at the end).
- People with the margin trading skill would have the option to fully pre-fund their orders if they wish to and their order will appear with the "star" as well
(NB: This represents 0 server overhead for CCP, just an additional flag in the order)
- Hence a large buy order without star would immediately be more suspicious

Example 2
- Allow people to check the status of any order by right clicking it and select "Check if funded" option
- Since this would only be on a on-demand request, this requires very minimal overhead to the server. Basically it would allow to check if the order is good without have to actually having the items in hand and having to try to sell them.
embrel
BamBam Inc.
#58 - 2013-08-15 09:43:55 UTC  |  Edited by: embrel
Alicia Aishai wrote:
it is used by some to manipulate prices of certain items.


How? or do you mean in the scam-cases?

the skill is beneficial to the market as there are more open buy orders in the market. And they won't fail due to insufficient funds in 99.X% of the cases. At least this to date never happened with my orders (and I do have open buy orders that exceed my liquidity).

Why fix something that isn't broke?

Why fix this kind of scam and leave others? e.g. the "Hookbill for only X"-scam where there are three contracts of which 2 are no longer valid and the last one's the scam. Would you like to have a price check there too? If so, why? Why do you need to take away individual responsibility and hand it to the hold-hands system? The hookbill scam depends on people not looking at the amount in the contract. This is always a rather stupid thing to do. And what makes the margin scam different from a recruitment scam or grrr-goons latest renting scam?

The margin scam depends on people buying something at excessive prices. All the tools needed to see that this is a scam are there. Otherwise far more people would fall for it. But most don't.
Sable Moran
Moran Light Industries
#59 - 2013-08-15 09:47:54 UTC
Alicia Aishai wrote:
- Allow people to check the status of any order by right clicking it and select "Check if funded" option
- Since this would only be on a on-demand request, this requires very minimal overhead to the server. Basically it would allow to check if the order is good without have to actually having the items in hand and having to try to sell them.


You are suggesting CCP to add a mechanism which can be used to add DB server load on demand? Now shuuurely that wont be abused.

A feature well worth burning a bot account or two.

Minasheera Jones wrote:
The problem here is that one of the party in this transaction has insufficient insight


Nope, what they has is greed and stupidity. A combination that always must be punished, preferably through the wallet.

Sable's Ammo Shop at Alentene V - Moon 4 - Duvolle Labs Factory. Hybrid charges, Projectile ammo, Missiles, Drones, Ships, Need'em? We have'em, at affordable prices. Pop in at our Ammo Shop in sunny Alentene.
Alicia Aishai
Perkone
Caldari State
#60 - 2013-08-15 09:51:19 UTC
embrel wrote:
Alicia Aishai wrote:
it is used by some to manipulate prices of certain items.


How? or do you mean in the scam-cases?



How? By putting a large buy order close to the sell orders giving false impression the item is in demand. This is not aimed to be a scam but manipulate the perception of supply and demand for the asset. I have seen it done, believe it or not.

I don't see why my proposal to add an option to check if an order if funded or not (example 2 above) can be controversial except if you are a scammer or a price manipulator.