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[FINISHED] Want to pawn / use as loan collateral, to invest in patch.
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Rhivre
TarNec
Invisible Exchequer
#41 - 2016-05-03 00:24:46 UTC
Areen Sassel wrote:
https://www.themittani.com/features/plex-wall-incident carries an explanation of what was going on... well, I say "explanation" but frankly the step where one actually turns a profit eludes me. At the end "You now have about 0 ISK in your wallet, and buy orders for a total of 250,000 PLEX on the market" - all of which will evaporate as soon as they are touched because you have no ISK to back them up. (Even if you retained a modest quantity, you'll never fill all 250,000 or anything like it).

Someone explain it to me?



Because the orders dont fill all at once, and when he starts selling, he starts getting isk back to fill more orders

So, once 18000 have been bought and sold, he is left with profit on 18000 plex.

So, say he put in 100b, and got 1% profit on 18T isk, he would have 180b, if 2% 360b, if 3% 540b etc.

Fluffy Bunny Pic!

Areen Sassel
Dirac Angestun Gesept
#42 - 2016-05-03 02:47:50 UTC  |  Edited by: Areen Sassel
Rhivre wrote:
Areen Sassel wrote:
Someone explain it to me?

Because the orders dont fill all at once, and when he starts selling, he starts getting isk back to fill more orders.


This seems risky; the sellers have only got to get ahead of his cash-in-hand once, and every single order vanishes. Presumably he has to sleep sometimes.

Furthermore, I appreciate what you're saying - that in the ideal scenario, he could get the return on an enormous number of PLEX by having placed all these orders with the pre-patch broker fee so he's able to work with a smaller spread that anyone else... but what if the slump continues, and people just aren't buying enough? Again, all the buy orders go *pffft*.

ETA: In the worked example in the article, you started with 1T ISK and PLEX were 1B each. You ended up with 250,000 buy orders. To break even you then need a 4 million ISK profit on each PLEX; to double the capital, obviously, an 8 million profit. Now I daresay you could sell them eventually for that profit - it's a tiny percentage - but you don't want to sell them eventually. You have to keep them selling fast enough to refill the wallet to keep up with people selling into your buy orders. The idea on page 1 that "It does not rely on demand, it does not rely on supply" seems simply false; if the market goes into freefall (as it has) and there's no demand at the necessary sale price, then pretty soon all you've managed to do is drop a trillion ISK on broker fees. The OP was fortunate not to dump all their capital into it...
probag Bear
Xiong Offices
#43 - 2016-05-04 16:01:56 UTC
Areen Sassel wrote:

This seems risky; the sellers have only got to get ahead of his cash-in-hand once, and every single order vanishes. Presumably he has to sleep sometimes.


That is indeed the only risk. I've already talked to two people who have pointed out that they could easily make all my buy orders evaporate. The only disincentive is that it would also make them lose a lot of isk in the process.

Quote:
Furthermore, I appreciate what you're saying - that in the ideal scenario, he could get the return on an enormous number of PLEX by having placed all these orders with the pre-patch broker fee so he's able to work with a smaller spread that anyone else... but what if the slump continues, and people just aren't buying enough? Again, all the buy orders go *pffft*.


If the slump continues, I relist orders at a lower price. Instead of say a 3.888x muliplier at 1B, I have a 3.69x multiplier at 0.8B. Still worth it.

Quote:
You have to keep them selling fast enough to refill the wallet to keep up with people selling into your buy orders.


Why?
I think this is your main misconception. There's nothing that forces me to sell at a certain speed. I've played Eve for a total of ~180 minutes since patch-day so far. What would force me to stay on 24/7?
Areen Sassel
Dirac Angestun Gesept
#44 - 2016-05-04 18:08:17 UTC
probag Bear wrote:
Areen Sassel wrote:

This seems risky; the sellers have only got to get ahead of his cash-in-hand once, and every single order vanishes. Presumably he has to sleep sometimes.

That is indeed the only risk. I've already talked to two people who have pointed out that they could easily make all my buy orders evaporate.


If the market at large is mostly selling - especially, if it's relatively price insensitive because Mr VISA wants the ISK for a citadel right now - this will happen without effort on anyone's part, won't it?

Quote:
Quote:
You have to keep them selling fast enough to refill the wallet to keep up with people selling into your buy orders.

I think this is your main misconception. There's nothing that forces me to sell at a certain speed. I've played Eve for a total of ~180 minutes since patch-day so far. What would force me to stay on 24/7?


Because otherwise you would risk, with your depleted wallet (if you had dumped all your ISK into it as originally planned), your wallet becoming empty and all your buy offers evaporating at once. If you're online, you can combine selling and relisting to stay solvent (although relisting all those orders would be agony [1]); if not, a sufficiently large market movement will wipe you out.

(To be clear, I'm not trying to play the usual forum willy-waving game. If you explain to me in a civil fashion why I am mistaken, I will be pleased and grateful.)

[1] I suppose having placed them all once you could stagger the prices on relisting, which would make a complete wipeout much less likely.
probag Bear
Xiong Offices
#45 - 2016-05-04 21:59:10 UTC
Areen Sassel wrote:

[1] I suppose having placed them all once you could stagger the prices on relisting, which would make a complete wipeout much less likely.


I relist all my orders at 700mil each (in reality, I did 850mil). When I log on, I bring them up to current market price two at a time. A complete wipeout would require someone to temporarily take PLEX prices down to 700mil.
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