American Psycho: Eve Edition
Ever seen this movie? It's about a mega rich high-society investment banker that absolutely snaps one day and decides to take up the hobby of chopping people up in the most creative and brutal ways that he can think of. Absurd right? I would have said yes a couple of weeks ago. Today? No not at all.
Why the change of heart? There was a 'situation' on the market the other day...
Let me paint you a picture. At some point in the last couple of days the market ran out of Hornet EC-300 drones.Whether this was natural, or if someone bought them all out, I cannot say. For anyone out there that does any kind of trading, this is a really big deal. When this happens, it's like hitting the reset button on the price history of an item. It allows you to re-balance the value of said item based on supply and demand. Meaning, in this case, prices on these drones are going to go through the roof. Why? Because now the power to set prices no longer rests with the consumer (at least for the short term). If I want you to pay 75k each for these you have to make a decision, is it worth that to me or not. As long as the demand for that item stays strong, the price will stay where it is. Think of why you pay $3+ for a gallon of gas. You need it and I have it if YOU want it you need to give me $X. Now, being the enterprising fellow that I am, I took the opportunity to capitalize (pun intended) on this occasion. One of the first things that I did was to buy out most of the other ec-300 drones in the region to make it that much harder for the consumer to leverage the price down. What we as traders are trying to do here is build a foundation for economic tyranny. Now, that sounds bad, but it's just how the market works. To better tell this story, I need to let you know that the pre-event pricing on this particular drone was: Buy @ 5500isk, Sell @ 8500isk. Approximately a 54% profit, not bad at all. Once the event occurred, we re-established the Sell price @ 50,000isk. There was a lot that went into determining that price point, but there it is. Taking into account the new sell price and the cost of buying out all of the other drone orders the potential profit percent moves to a little over 400% (w00t!). In my particular case I would have been looking at ~50M in profit over what I laid out for the drones, not a ton, but a respectable haul all the same. Also, don't forget, I'm not the only one on the market. Therein lies the problem...
At this point in time a phrase comes to mind "Honor among thieves". The question is, is there, or is there not honor among thieves? Think of the real world airline industry. They collude amongst themselves to maintain the highest possible profit margins as a group. If one introduces a new charge and you are dumb enough to pay it, then the rest will roll it out in kind. While they compete to profit individually, they work to make sure that they do not impair profit collectively. Example, there is a pot of $10 billion for the industry to share. They compete to see how big a slice of that $10B they can get. But if one of them was too greedy, then it would potentially wreck the profits of the whole, I.E. now they only have a $6 billion dollar pot to fight over. Such is the case of EC-300 drones.
While we traders as a whole were positioned to split a significantly large profit, one of us was the weakest link. One of us decided that instead of exercising a little patience waiting for the profit to come to him, he decided to undercut the rest of us by 20k cutting the potential profit of this venture almost in half! You might say 'but hey that's still over 200% profit!' and you would be right, but this issue is that when someone makes that kind of sprint for profit, the race is on, and everyone might follow suit. Now in most cases, if this happens in my daily trading, i would just buy out his stock and take his potential profit and add it to my own, but in this case, he had just too much to buy (19,000+ drones @ 30kisk = 570Misk + taxes and brokers fees). In hind sight I should have just bought him out to protect everyone's profit, but I waited to see what the rest of the traders would do. Unfortunately after many long minutes of holding our collective breath my other trading comrades decided to join the race. A few days later I came out of it ok. I was able to move my entire stock at about a 100% profit over the course 0f the price war for a total profit of a little over 20M. A far cry from the original 50M I was looking for, but profit is profit and I will take it, but if we had acted together as one, this would not have happened. All that's left to do now is buy a drone or two off of the douchebag that screwed us all, wardec his corp and slaughter every last one of those dogs, their bitch mothers, and anyone/thing else that they have ever loved...
Not too shabby for a n00b...
Just wanted to make like our friends over at K162space and post my numbers. This reflects the last two weeks and is 100% of everything I've ever traded. I went from having 500M isk in my pocket and knowing nothing about the market to the numbers you see below. They are in the following order: Money Out | Money In | Pending Sales | Total Profit | Average Profit Percent Per Item.
| Total: | 1,631,189,064 | Total: | 2,573,079,786 | Total: | 39,142,093 | Total: | 981,032,815 | _77.4 % | ||
