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Feedback Request - Margin trading and accurate market UI

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Alexia Marhx
The Witch's Den
#621 - 2014-03-27 19:36:22 UTC  |  Edited by: Alexia Marhx
I am wondering... Will this thread lead to something, or is it dead in the water? Will the DEVs keep us up to date here about their deliberations, or any further input they may need? The development in re of the “margin trading” scam/issue/”not a scam and not an issue” matters to me...
Justin Cody
War Firm
#622 - 2014-03-27 20:20:56 UTC  |  Edited by: Justin Cody
CCP Rise wrote:
This is a problem that my team has been hoping to fix for quite some time now. We were prepared to make changes for the Rubicon release but after a lengthy discussion with the CSM we didn't feel satisfied with current solutions and so now we want to open up the discussion to you guys for help.

In case you aren't sure what I'm talking about:

The Margin Trading Scam exploits the mechanic where a character with the Margin Trading skill can place buy orders and only place a portion of the ISK in escrow. If they then transfer all of their ISK away, the order will fail when someone tries to sell to it, essentially allowing them to make a fake buy order. Usually this means players make purchases that are grossly overpriced with the expectation that they can sell them to the margin trading-based buy order and make money, but instead are left with a pile of items that they will have to take a loss on.

I want to make another thing clear about this issue which came up when talking with the CSM:

This isn't about scamming or whether or not it's okay for people to trick other people, which is obviously extremely EVE and we have no problem with. The issue here is that the client (via the market interface) is essentially lying to the player by showing an order which can't actually be filled.

The solution we proposed to the CSM initially was based around the idea that if you didn't have enough money in your wallet to back an order, that order would be cancelled. This would still allow traders to benefit from being able to have multiple orders for which they couldn't cover the total. For example, I could have one buy order for a thorax at 5 mil, and another order for a rupture at 5 mil with only 7 mil in my wallet. If my wallet went below 5mil, it would cancel both orders.

There are several problems with this solution, the biggest of which is that it puts unwanted pressure on legitimate up-and-coming market traders who need to be able to leverage the ISK they have. There is also some advanced market gameplay around putting up very large buy orders which you can't technically cover, but which also will never realistically get filled. If you guys have feelings either way about this solution please share.

A second possibility, which emerged from the discussion with the CSM, was built around marking orders in the market interface based on whether or not they were placed using margin trading. This would mean that when you place a buy order you would have to decide whether that would be a 'guaranteed' order or not, and then it would be marked (colored or check boxed or something) in the market interface so that people would know whether there was risk involved in trying to fill the order. This has several problems also, including: making legitimate market activity seem shady, making the interface more confusing, adding clicks for people placing orders and also costing new players money by steering them away from cheaper orders because of fear of scams.

It's a complex problem and we want to handle it carefully but we would appreciate any ideas or insights you guys can provide to help us.

Thanks!


Here's your problem. You're trying to leverage purchasing power with no debt issuance mechanic. So if I were a trader and only had 7M ISK, but I wanted to put up multiple low buy orders...say 3 orders for 3M isk each I would need to borrow that additional 2M isk and of course given time pay it back with interest.

This is where the contract system comes in. Enable us to create a debt contract complete with time limit and fixed interest rate (of player determination). This sounds ok except for the "what if I don't wanna pay you" scenario. Well that mechanic is the tough part. I for one would like to see debtors permanently suspect flagged until they either pay-up OR CCP can make their wallets go into the red to pay back the debt to the issuer but also give kill-rights to the debt issuer on the debtor.

So allowing someone to buy on margin is more a function of the contract system than of the market imho. You need money in the wallet to buy something no matter what. If you don't have it you can't purchase. And since the market itself doesn't have a credit system...the contract system can make that up for now.

And no you shouldn't be able to take out loans from NPCs.
Xe'Cara'eos
A Big Enough Lever
#623 - 2014-03-27 20:38:15 UTC
Justin Cody wrote:
CCP Rise wrote:
This is a problem that my team has been hoping to fix for quite some time now. We were prepared to make changes for the Rubicon release but after a lengthy discussion with the CSM we didn't feel satisfied with current solutions and so now we want to open up the discussion to you guys for help.

In case you aren't sure what I'm talking about:

The Margin Trading Scam exploits the mechanic where a character with the Margin Trading skill can place buy orders and only place a portion of the ISK in escrow. If they then transfer all of their ISK away, the order will fail when someone tries to sell to it, essentially allowing them to make a fake buy order. Usually this means players make purchases that are grossly overpriced with the expectation that they can sell them to the margin trading-based buy order and make money, but instead are left with a pile of items that they will have to take a loss on.

I want to make another thing clear about this issue which came up when talking with the CSM:

This isn't about scamming or whether or not it's okay for people to trick other people, which is obviously extremely EVE and we have no problem with. The issue here is that the client (via the market interface) is essentially lying to the player by showing an order which can't actually be filled.

The solution we proposed to the CSM initially was based around the idea that if you didn't have enough money in your wallet to back an order, that order would be cancelled. This would still allow traders to benefit from being able to have multiple orders for which they couldn't cover the total. For example, I could have one buy order for a thorax at 5 mil, and another order for a rupture at 5 mil with only 7 mil in my wallet. If my wallet went below 5mil, it would cancel both orders.

There are several problems with this solution, the biggest of which is that it puts unwanted pressure on legitimate up-and-coming market traders who need to be able to leverage the ISK they have. There is also some advanced market gameplay around putting up very large buy orders which you can't technically cover, but which also will never realistically get filled. If you guys have feelings either way about this solution please share.

A second possibility, which emerged from the discussion with the CSM, was built around marking orders in the market interface based on whether or not they were placed using margin trading. This would mean that when you place a buy order you would have to decide whether that would be a 'guaranteed' order or not, and then it would be marked (colored or check boxed or something) in the market interface so that people would know whether there was risk involved in trying to fill the order. This has several problems also, including: making legitimate market activity seem shady, making the interface more confusing, adding clicks for people placing orders and also costing new players money by steering them away from cheaper orders because of fear of scams.

It's a complex problem and we want to handle it carefully but we would appreciate any ideas or insights you guys can provide to help us.

Thanks!


Here's your problem. You're trying to leverage purchasing power with no debt issuance mechanic. So if I were a trader and only had 7M ISK, but I wanted to put up multiple low buy orders...say 3 orders for 3M isk each I would need to borrow that additional 2M isk and of course given time pay it back with interest.

This is where the contract system comes in. Enable us to create a debt contract complete with time limit and fixed interest rate (of player determination). This sounds ok except for the "what if I don't wanna pay you" scenario. Well that mechanic is the tough part. I for one would like to see debtors permanently suspect flagged until they either pay-up OR CCP can make their wallets go into the red to pay back the debt to the issuer but also give kill-rights to the debt issuer on the debtor.

So allowing someone to buy on margin is more a function of the contract system than of the market imho. You need money in the wallet to buy something no matter what. If you don't have it you can't purchase. And since the market itself doesn't have a credit system...the contract system can make that up for now.

And no you shouldn't be able to take out loans from NPCs.


genius - you've just introduced a whole new ingame profession - loansharks - and I foresee loansharks working closely with bounty hunters....... :D

For posting an idea into F&I: come up with idea, try and think how people could abuse this, try to fix your idea - loop the process until you can't see how it could be abused, then post to the forums to let us figure out how to abuse it..... If your idea can be abused, it [u]WILL[/u] be.
Methonash Qorranto
Aliastra
Gallente Federation
#624 - 2014-03-27 21:02:43 UTC
Justin Cody wrote:

Here's your problem. You're trying to leverage purchasing power with no debt issuance mechanic. So if I were a trader and only had 7M ISK, but I wanted to put up multiple low buy orders...say 3 orders for 3M isk each I would need to borrow that additional 2M isk and of course given time pay it back with interest.

This is where the contract system comes in. Enable us to create a debt contract complete with time limit and fixed interest rate (of player determination). This sounds ok except for the "what if I don't wanna pay you" scenario. Well that mechanic is the tough part. I for one would like to see debtors permanently suspect flagged until they either pay-up OR CCP can make their wallets go into the red to pay back the debt to the issuer but also give kill-rights to the debt issuer on the debtor.

So allowing someone to buy on margin is more a function of the contract system than of the market imho. You need money in the wallet to buy something no matter what. If you don't have it you can't purchase. And since the market itself doesn't have a credit system...the contract system can make that up for now.

And no you shouldn't be able to take out loans from NPCs.


That sounds awesome.

+1.
Alexia Marhx
The Witch's Den
#625 - 2014-03-27 22:15:07 UTC
^^ Yeah... Sounds REALLY good! Big smile
Xe'Cara'eos
A Big Enough Lever
#626 - 2014-03-27 22:48:01 UTC
please CCP - do this!

For posting an idea into F&I: come up with idea, try and think how people could abuse this, try to fix your idea - loop the process until you can't see how it could be abused, then post to the forums to let us figure out how to abuse it..... If your idea can be abused, it [u]WILL[/u] be.
ZaBob
The Scope
Gallente Federation
#627 - 2014-03-28 02:54:03 UTC
Justin Cody wrote:

Here's your problem. You're trying to leverage purchasing power with no debt issuance mechanic. So if I were a trader and only had 7M ISK, but I wanted to put up multiple low buy orders...say 3 orders for 3M isk each I would need to borrow that additional 2M isk and of course given time pay it back with interest.

This is where the contract system comes in. Enable us to create a debt contract complete with time limit and fixed interest rate (of player determination). This sounds ok except for the "what if I don't wanna pay you" scenario. Well that mechanic is the tough part. I for one would like to see debtors permanently suspect flagged until they either pay-up OR CCP can make their wallets go into the red to pay back the debt to the issuer but also give kill-rights to the debt issuer on the debtor.

So allowing someone to buy on margin is more a function of the contract system than of the market imho. You need money in the wallet to buy something no matter what. If you don't have it you can't purchase. And since the market itself doesn't have a credit system...the contract system can make that up for now.

And no you shouldn't be able to take out loans from NPCs.


Brilliant!

While I don't see the current situation as a problem in need of a solution, your idea is a positive addition -- not a fix, but a whole new opportunity.

This would be a whole heck of a lot more interesting than the new hacking minigame. The economic consequences are intriguing. And allowing new(er) players (or less active ones) to borrow may allow them to accomplish things they couldn't otherwise do -- or fail, in interesting ways.

I think, though, that for the health of the game, there needs to be something akin to bankruptcy. That is, if you screw up and end up heavily in debt, you should not be left in a situation where the game is basically unplayable, with your only (perceived) option being to quit.

One possibility might be, that to borrow 1,000,000 ISK, you have to put 20,000 ISK into escrow when you create the contract. This would limit how deeply you could go into debt, relative to your earning potential.

And perhaps you should only be able to create public contracts, with no control over who picks up the contract? So you're at risk of having it picked up, say, by the Goons, who may choose to harass you to try to prevent you from repaying, so they can harass you further?
DetKhord Saisio
Seniors Clan
#628 - 2014-03-28 06:12:45 UTC
Buyer beware is often a valid warning, more so for eve markets. Though, I think there should be some way to identify (even if only partially) the validity of a purchase. Since margin trading is a required skill for the scam, identify the seller's margin trading level (I, II, III, IV, V) upon mouse-over of 'suspect' market orders i.e. escrow of <100%. Otherwise, unsuspecting victims that do not learn how to spot the clues they may fall for the scam.
Justin Cody
War Firm
#629 - 2014-03-28 12:35:58 UTC
The idea of requiring a deposit on the loan contract or an object of collateral value would be acceptable if it reduced the interest rate paid on the principle amount borrowed. All of this is fairly complicated and at the end of the day would involve players determining the rate reduction...principally at first through 1 on 1 negotiations.

At some point an EVE Credit Corp could be formed of high rollers and all kinds of financial products would be rolled out. The sad fact is that even though ISK is akin to a synthetic drawing right it does not feature the ''block-chain" ledger of bitcoin and other alt-coins that helps to track transaction histories and prevent fraud.

So over time there would be standard contracts but if you have enough capital to borrow even larger sums of money (from an existing pool of isk which is essentially the savings of an individual or group) you could get special rates and the like. However the system would not let you create isk out of nothing as a debt issuer. That interest is paid back by a rise in price and ostensibly value. Of course the risk of general price inflation exists through market manipulation and speculation on various assets (ships/minerals, ore, mods, implants, PI, or whatever).

This would be a good mechanic to test on SiSi for a year or more before rolling it out on Tranquility where a server rollback is nigh on impossible.
Justin Cody
War Firm
#630 - 2014-03-28 12:56:43 UTC
creating market efficiencies through a debt (margin) mechanic may not work all that well to be quite honest. An economy that is the size of the New Eden Cluster already has (sci-fi RP moment here) debt issued at so many levels and ISK represents a trade currency in the equivalent value of say 100 tonnes of gold per ISK or some conversion rate.

The only up-side to a debt mechanic in EVE is that is has to come out of a pool of existing monies and would not be a fractional reserve system. Instead it would be an actual full reserve Hayek-approved lending entity. So a player corporation could never actually lend out more than it has in ISK as when a contract is formed CONCORD or Garoun Investment Bank or whoever would escrow the money (as a service becuase capsuleers are space gods with laser eyes who also **** nuclear tipped warheads) before it is transferred to a player who has accepted the contract. This pass-through makes sure that the money is in-fact in the account.

The issue at allowing scamming in this form is too big to go into here but I think the recent RL fines being paid by JP Morgan and others should be a lesson as to the damage that shady lending can do. Intentionally introducing a mechanic like this into EVE has a danger of massive power creep and scales in a non-linear fashion as its tentacles will reach into every part of the market.

That's my **CCP BEWARE** statement. No matter how clever you are, the issue is that a system is being created. We are gamers...we game systems. Consider the meta, insider trading, contract trading and derivatives that would follow.
Medalyn Isis
Doomheim
#631 - 2014-03-28 13:33:17 UTC
I haven't read the entire thread, so am not sure if this idea has been suggested yet.

But perhaps implement the system so that firstly, the person creating the buy order can define what percentage they wish to place in escrow, and how much to withhold, up to the maximum that is allowed by the margin trading skill.

If, the order is unable to be fulfilled, then the person selling to the sell order will get up to the maximum isk placed in escrow with as many orders being fulfilled as possible.

All sold items and remaining isk will be impounded by the broker for failure to supply to the given contract.

This way, sometimes a risky investment might backfire, as in real life.
Justin Cody
War Firm
#632 - 2014-03-28 19:44:55 UTC
And of course this mechanic should be rolled in alongside an actual in-game stock market. corporations can then list their shares on an exchange...sadly this would have to be an in-game CONCORD exchange. No player run exchange as that would detract from being immersed in the game. Player sites could have advisory and valuation/arbitrage services but as far as actual exchange trading...that would have to be the New Eden Stock Echange...or NESE.

Could introduce skills for lowering per-trade fees, bulk-trading skill, derivative trading skill. Additionally using the contract system...each share essentially being a small contract...you could put in a dividend section with a timed payout (every 3 months based on either current price at time of payout OR a fixed rate based on an agreed price like a bond.

Of course that stock with the fixed rate payout would have a no-vote clause and be considered preferred stock.

Of course all this talk of markets and the like puts us on the track to say...HEY what about bonds?

maybe I'm going overboard but existing systems could be adapted to serve this function.

Imagine high volume traders using their algorithms in EVE through the CREST api system. No they wouldn't get instant action like happen on RL exchanges necessarily but simply consider the implications of what you are suggesting.
Justin Cody
War Firm
#633 - 2014-03-28 19:47:23 UTC
Of course you could have all of the exchanges and contracts ride on your own version of the block-chain ledger used by bitcoin.

I am mentally at half mast right now thinking of all the glorious...no no I must take a cold shower.
nia starstryder
Native Freshfood
Minmatar Republic
#634 - 2014-03-28 22:05:04 UTC
As a market tycoon (5) with a margin trading of 4, I frequently use the ability to buy stuff on margin. Currently my sell orders is just under 6 billion, while my buy orders is just under 750k (190k, plus an addition 558k on sell). What this means is what I am short is only a small fraction of my sell orders.

When someone is doing the scam and such, they have no sell orders.

I believe the amount of your short buys should be a fraction of the sell orders. This will mean that people actually have a good chance of making the money to cover the money your short. To prevent people from abusing this by putting a sell that will never sell, such as a trit for 100 billion, it would have to go by market averages.
Psychoactive Stimulant
#635 - 2014-04-03 21:45:55 UTC
Bump...

Also, that idea up there about blah blah interest and loans... that won't work cause you can borrow money from an alt... and just never leave the station. I mean. Why would a known margin scammer who knows he's flagged ever leave? All it takes is an alt.

TheSmokingHertog
Julia's Interstellar Trade Emperium
#636 - 2014-04-04 02:31:40 UTC
@ Psychoactive Stimulant

We should start a thread with links to threads that still have no answers ;)... :D

"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 =-
DetKhord Saisio
Seniors Clan
#637 - 2014-04-12 09:15:04 UTC
Swiftstrike1 wrote:
Give every character a market rating like on eBay. Expressed as a percentage, it would go down every time one of their orders failed to complete for whatever reason. Players could then make the choice as to whether or not they want to accept a buy/sell order based on the issuer's rating.

You could even include an option in the market to "hide all orders where the issuer's market rating is below x%"

Thomas Hurt wrote:
Automatically cancel any orders where the 'Minimum Buy Volume' * 'Price per unit' is greater than the amount in your wallet


^These would do it for me. Yes, the option is still there for players to scam others. If you are not paying attention, you can still get taken.
Gully Alex Foyle
The Scope
Gallente Federation
#638 - 2014-04-24 23:34:04 UTC
Rise,

try to get 50 people that have fallen for the 'Margin Trading Scam'.

Ask them if they have fallen for it TWICE.

When you get 50 NO, you'll have your solution:

JUST CLEARLY INFORM NEW PLAYERS ABOUT BUY ORDERS NOT BEING 100% 'CERTAIN'

Make space glamorous! Is EVE dying or not? Ask the EVE-O Death-o-meter!
Yolo
Unknown Nation
#639 - 2014-04-25 13:26:41 UTC
Orders that a player is unable to cover for with its current level of wallet should be hidden from market (displayed orange in market orders for self), once the wallet level returns the market order should become visible again.

This:
A: Solves the problem as a whole.
B: Prevents traders from losing 305 buy orders because of temporary flux in wallet levels.

- since 2003, bitches
Loraine Gess
Confedeferate Union of Tax Legalists
#640 - 2014-04-25 16:26:44 UTC
Justin Cody wrote:

Here's your problem. You're trying to leverage purchasing power with no debt issuance mechanic. So if I were a trader and only had 7M ISK, but I wanted to put up multiple low buy orders...say 3 orders for 3M isk each I would need to borrow that additional 2M isk and of course given time pay it back with interest.

This is where the contract system comes in. Enable us to create a debt contract complete with time limit and fixed interest rate (of player determination). This sounds ok except for the "what if I don't wanna pay you" scenario. Well that mechanic is the tough part. I for one would like to see debtors permanently suspect flagged until they either pay-up OR CCP can make their wallets go into the red to pay back the debt to the issuer but also give kill-rights to the debt issuer on the debtor.

So allowing someone to buy on margin is more a function of the contract system than of the market imho. You need money in the wallet to buy something no matter what. If you don't have it you can't purchase. And since the market itself doesn't have a credit system...the contract system can make that up for now.

And no you shouldn't be able to take out loans from NPCs.




Loan to alt > get CCP to make wallet negative > create money out of thin air


Suspect? > Who cares