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Eduj Bestlie
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Posted - 2011.07.20 02:25:00 -
[1]
I've had some billions stored up a while now with the intent of purchasing a well developed trader. However, reading some of the new posts around here have called that strategy into question. I propose the question to the more experienced market crowd then; spend a few billion on a market alt, or save a few billion and invest that isk into a new alt of my own creation?
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Serene Python
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Posted - 2011.07.20 02:38:00 -
[2]
Save the billions and use that for trading. Take a week or two for training basic trading skills while you decide what kind of trading you'd like to do. You might realize you only need a couple trade order skills cause the margins are large enough you don't need to pay as much attention to fees.
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Tigerras
Smash Incorporated
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Posted - 2011.07.20 02:46:00 -
[3]
The amount of skills you actually need is fairly low. So I wouldn't worry about buying one. --------------------------------------- Tigerras's Audits and Third-Party Servicing |
Diomedes Calypso
Aetolian Armada
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Posted - 2011.07.20 14:52:00 -
[4]
You can do the math yourself . Calculate your "losses" if you're paying an extra 1/4 of one percent on each trade.
100 million = 250k
1 billion = 2.5 million
10 billion 25 million
100 billion 250 million
400 billion 1 billion Minimum to buy a character and unlikely for it to have high standing and be specialized beyond w
1 trilllion 2.5 billion .. probably what it will cost you to get a high faction standing character with 5 marketing and 5 accounting..maybe it shouldnt cost that much but even there things sell quickly.. faction standing is hard to find on the char bazaar and it will likely come hand in and with a chracter in the 5 billion to 10 billion range which will also not have the 5's in the key trading stuff.
Its true, that with high faction, corp (of the station) and 5s in Marketing and Accounting you might be saving more like 1/2 of a percent over a character thats never run a mission and only has a week of training...then you can cut the numbers in half above but the order of magnitude is still there.
Try trading for a few months.. use the extra billions and you'll make far more on the extra trading that will allow than the .25 % will save you until you've got 10 x that actively churning.
If you're still devoted to trading and find you're trading at a pace doing 50 billion isk a month of trades, then consider a purchase.
You'd lose so little relative to the cost of a character on the first few months that its hardly worth worrying about if you've been sucessful.. if not you wouldn't want to be losing that 750 million of char transfer costs reselling.
Most trading alts don't need procurment or visibilty and margin trading is a sign (to me) of having less capital than you would if you were sucessful at trading. (Probably useful for scamming though)
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Zeta Zhul
Caldari Preemptive Paranoia
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Posted - 2011.07.20 15:25:00 -
[5]
Quote: Most trading alts don't need procurment or visibilty and margin trading is a sign (to me) of having less capital than you would if you were sucessful at trading. (Probably useful for scamming though)
Ummmm sorry but no.
When you have multiple trade alts all within the same player corp and if you use corp market orders then your Margin Trading becomes extremely useful since the pool of isk that can be used to pay for buy orders beyond escrow all can come from the corp wallet. So you need to reserve less isk in the corp wallet for your buy orders. I've usually done about a 20-1 ratio of buy order isk vs corp wallet isk reserved for buy orders.
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Diomedes Calypso
Aetolian Armada
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Posted - 2011.07.20 15:46:00 -
[6]
Originally by: Zeta Zhul
Quote: Most trading alts don't need procurment or visibilty and margin trading is a sign (to me) of having less capital than you would if you were sucessful at trading. (Probably useful for scamming though)
Ummmm sorry but no.
When you have multiple trade alts all within the same player corp and if you use corp market orders then your Margin Trading becomes extremely useful since the pool of isk that can be used to pay for buy orders beyond escrow all can come from the corp wallet. So you need to reserve less isk in the corp wallet for your buy orders. I've usually done about a 20-1 ratio of buy order isk vs corp wallet isk reserved for buy orders.
I guess I should have used the word "most" there too. I'm sure there are some methods that make use of margin trading well .
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RutilusUnus
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Posted - 2011.07.20 15:55:00 -
[7]
Originally by: Diomedes Calypso
Originally by: Zeta Zhul
Quote: Most trading alts don't need procurment or visibilty and margin trading is a sign (to me) of having less capital than you would if you were sucessful at trading. (Probably useful for scamming though)
Ummmm sorry but no.
When you have multiple trade alts all within the same player corp and if you use corp market orders then your Margin Trading becomes extremely useful since the pool of isk that can be used to pay for buy orders beyond escrow all can come from the corp wallet. So you need to reserve less isk in the corp wallet for your buy orders. I've usually done about a 20-1 ratio of buy order isk vs corp wallet isk reserved for buy orders.
I guess I should have used the word "most" there too. I'm sure there are some methods that make use of margin trading well .
Margin Trading was an extremely essential tool for me when I was trading. The region that I traded in had a small population so there wasn't many things sold to me. I basically bought and resold at a higher price. It worked well for me because I never was sold much and so always had a safe pool of isk in reserve.
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Tutskii
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Posted - 2011.07.20 16:04:00 -
[8]
It really depends.
There are alts that I actively DONT want to have margin trading just so that there is no need to leave isk on.
As for whether its worth buying an alt or not?
Well, it depends on whether there is more use for you on the isk, or the time. A useful trading alt for me has either freighter or killer whale (for moving stuff, it takes longer than im willing to wait) a decent number of orders, and the tax and fees skills (maybe some production too if you are out of things to train). All of this can take over a month to train, but can usually be bought for a bit over 2 billion depending on what you want. (Standings are nice too, and those are a bit more expensive)
Would you make more money with the char in that time? Or would you be better training? its up to you but consider that for each month of training that you save, you also save however much the plex or time codes would be worth. You can substract this from the cost of the alt since you would have paid that anyway. Also substract skillbooks, implants, and whatever.
In the end, other than the preponderance of ******ed names, I've found buying chars is better.
YMMV. But really, what I want to say is that "No non vanity MT's" is the only line worth defending. |
Bloody Wench
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Posted - 2011.07.20 19:43:00 -
[9]
Margin trading means you have less stagnant isk sitting in slow buys. You can have many buys in many different areas far exceeding your actual reserve.
You do realise that your buys dont all get filled within the hour right?
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Diomedes Calypso
Aetolian Armada
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Posted - 2011.07.21 02:19:00 -
[10]
Originally by: Bloody Wench Margin trading means you have less stagnant isk sitting in slow buys. You can have many buys in many different areas far exceeding your actual reserve.
You do realise that your buys dont all get filled within the hour right?
Yeah. They don't sell right away either and if you buy a lot of one thing even at a steal, it might be incovenient to be so focussed and take too long to get rid of an unbalanced amount of inventory.
I had one character that did regional buys on 40 items including paying 75 % of retail on attribute implants.
I'd get dropped 10 standard implants at 16 million (the were selling in the low 20's) and even though they were cheap I'm not sure I wanted to buy like 30 of them if I had used margin trading to have bigger buy orders.
I definitely wanted to have full supplies of each in basic and standard in the stations i resold them at because people would pay millions more to know they could get them all at one place after they got popped (and mostly sold to carebears who replaced all 5 right away)
Well, I guess I just used the cash basis to keep my inventories balanced.
I could have put up more orders for plex or orcas at 40% off which i've had luck with too...those orders that hang there sometimes get filled and those do tie up money for something well worth the trip (or no need for a trip with plex)
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Kei Darker
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Posted - 2011.07.24 17:37:00 -
[11]
Originally by: Diomedes Calypso You can do the math yourself . Calculate your "losses" if you're paying an extra 1/4 of one percent on each trade.
100 million = 250k
1 billion = 2.5 million
10 billion 25 million
100 billion 250 million
400 billion 1 billion Minimum to buy a character and unlikely for it to have high standing and be specialized beyond w
1 trilllion 2.5 billion .. probably what it will cost you to get a high faction standing character with 5 marketing and 5 accounting..maybe it shouldnt cost that much but even there things sell quickly.. faction standing is hard to find on the char bazaar and it will likely come hand in and with a chracter in the 5 billion to 10 billion range which will also not have the 5's in the key trading stuff.
This math is incorrect because you are taking the percentages from the wrong number. To figure out losses, you'll need to take the percentage from the percentage profit instead of using the total cost of the item as 100%. Here is the correct math: Let's say when you trade that you are trading on items that have margins of 3%. Instead of losing 2% of total order to tax & broker, you instead are losing 1.5% (lets say you get broker fee down to 0.5%). This means that you are increasing profits by 50% because instead of making 1% profit per item (3%-2%), you are instead making 1.5% profit per item (3%-1.5%).
100 Million Profit with low standing character = 150 Million profit with high standing character = Loss 50 Million
1 Billion = Loss 500 Million
10 Billion = Loss 5 Billion.
Etc.
This of course assumes that all of your trades take place on items with a 3% margin. If you trade with higher percent margins from buy to sell, you'll see less of an advantage.
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Diomedes Calypso
Aetolian Armada
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Posted - 2011.07.24 21:32:00 -
[12]
Originally by: Kei Darker
Originally by: Diomedes Calypso You can do the math yourself . Calculate your "losses" if you're paying an extra 1/4 of one percent on each trade.
100 million = 250k
1 billion = 2.5 million
10 billion 25 million
100 billion 250 million
400 billion 1 billion Minimum to buy a character and unlikely for it to have high standing and be specialized beyond w
1 trilllion 2.5 billion .. probably what it will cost you to get a high faction standing character with 5 marketing and 5 accounting..maybe it shouldnt cost that much but even there things sell quickly.. faction standing is hard to find on the char bazaar and it will likely come hand in and with a chracter in the 5 billion to 10 billion range which will also not have the 5's in the key trading stuff.
This math is incorrect because you are taking the percentages from the wrong number. To figure out losses, you'll need to take the percentage from the percentage profit instead of using the total cost of the item as 100%. Here is the correct math: Let's say when you trade that you are trading on items that have margins of 3%. Instead of losing 2% of total order to tax & broker, you instead are losing 1.5% (lets say you get broker fee down to 0.5%). This means that you are increasing profits by 50% because instead of making 1% profit per item (3%-2%), you are instead making 1.5% profit per item (3%-1.5%).
100 Million Profit with low standing character = 150 Million profit with high standing character = Loss 50 Million
1 Billion = Loss 500 Million
10 Billion = Loss 5 Billion.
Etc.
This of course assumes that all of your trades take place on items with a 3% margin. If you trade with higher percent margins from buy to sell, you'll see less of an advantage.
I should have used the word "costs" The fees are based on volume.
Your numbers are correct if you're thinking ROE and stuff but for most products your trade volume isn't dependendant on the capital you invest but the volume of the product sold daily and the amount of time you have your orders at the tip of the market.
I'm not objecting to you entirely, but just saying % return in eve really has little to do with the types of cost of capital calcualtions pertinent in the real world. But yes, if you're looking at metrics like return on capital the lower tax rates will have a more material effect than just the percentage of sales.
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AtheistOfFail
AoF Lottery Services
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Posted - 2011.07.24 22:15:00 -
[13]
Originally by: Eduj Bestlie I've had some billions stored up a while now with the intent of purchasing a well developed trader. However, reading some of the new posts around here have called that strategy into question. I propose the question to the more experienced market crowd then; spend a few billion on a market alt, or save a few billion and invest that isk into a new alt of my own creation?
Use your billions and make ISK. I made 100m (from 5k) in 1 week on my alt with trade 2. No other trade skills. The more ISK you have to start with, the better. Just be careful and don't panic!
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Zeta Zhul
Caldari Preemptive Paranoia
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Posted - 2011.07.25 04:22:00 -
[14]
Originally by: AtheistOfFail
Originally by: Eduj Bestlie I've had some billions stored up a while now with the intent of purchasing a well developed trader. However, reading some of the new posts around here have called that strategy into question. I propose the question to the more experienced market crowd then; spend a few billion on a market alt, or save a few billion and invest that isk into a new alt of my own creation?
Use your billions and make ISK. I made 100m (from 5k) in 1 week on my alt with trade 2. No other trade skills. The more ISK you have to start with, the better. Just be careful and don't panic!
Oh and don't forget your towel!
...
You -do- have a *towel* right? Right? RIGHT!?
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