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Plato Idari
TK Corp
0
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Posted - 2011.11.15 19:46:00 -
[1] - Quote
I am posting this here to get MD veterans input on this idea. It is my hope that with your ideas and support we will be able to ask CCP for something that is both implementable and of benefit to us all.
The recent run up in PLEX and Oxygen Isotopes has exposed, yet again, that our markets have a big structural flaw. Our inability to make trades that would be profitable if a goods price were to fall. This limits the downward pressure on price spikes and limits our own abilities to profit from price fluctuations.
The obvious solution would be to implement a secondary options market. However, the amount of work that would be necessary to create such a market, combined with the fact that no one could be trusted with the hundreds of billions of ISK that would flow through such a market, would cripple any player run secondary market.
As a result I feel our only viable option is to ask CCP to implement an options market. If we are to make such a request, there are a few things we should concern ourselves with:
Whatever we request must be something that traders want and actually makes station trading better. Whatever is asked for it must be something that CCP can do. Attention must be paid to ease of implementation and we should provide viable answers in advance to anticipatable functionality problems. The change must be beneficial to the player base as a whole, not just traders.
A good starting point might be a clone (or two) of the existing market interface. One for puts and one for calls. I would very much like to see at least one new skill for station trading, the simplest suggestion I can think of would be an order limit.
Other than giving us the ability to profit by trading options this would encourage price stability. It would allow manufacturers to lock in mineral prices and good's sale prices in advance. This would encourage investment in industry and be of great benefit to the eve economy.
The biggest pitfall I can see at the moment is how to deal with players who are unable to honor their options. If you sell a call and then do not have the item in question when the buyer exercises that option you should be forced to buy from the market in question. However, this idea has a hairy problem of its own, because it could be used as a basis for exploiting by driving an alt deeply negative one might be able to "mint" money. |
OllieNorth
R-K Industries Sexy Alliance
13
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Posted - 2011.11.15 19:56:00 -
[2] - Quote
It seems like you are asking CCP to set up a complete second market interface for a good that does not exist in-game. The option market is by definition a meta-market, as a result, it HAS to be player run. If you implement it in-game, it simply becomes just another market item. The downside to implementing in EVE is that there are no consequences. Any secondary market, whether options or stocks, requires a rule set to function. If players are under no obligation to pay debts, such a scheme will fail.
EVE is built on a no-rules philosophy, so to implement these on an in-game basis, we would have to break that and add in a set of rules for this particular case. CCP has shown significant reluctance to do this, so I can't see it happening.
As a result, this would only function if the players could enforce the laws. Due to logoffski and station camping and such, this is patently impossible.
TL;DR Secondary markets are impossible in EVE due to lack of regulation. |
Plato Idari
TK Corp
0
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Posted - 2011.11.15 20:30:00 -
[3] - Quote
OllieNorth wrote:It seems like you are asking CCP to set up a complete second market interface for a good that does not exist in-game. The option market is by definition a meta-market, as a result, it HAS to be player run. If you implement it in-game, it simply becomes just another market item. The downside to implementing in EVE is that there are no consequences. Any secondary market, whether options or stocks, requires a rule set to function. If players are under no obligation to pay debts, such a scheme will fail.
EVE is built on a no-rules philosophy, so to implement these on an in-game basis, we would have to break that and add in a set of rules for this particular case. CCP has shown significant reluctance to do this, so I can't see it happening.
As a result, this would only function if the players could enforce the laws. Due to logoffski and station camping and such, this is patently impossible.
TL;DR Secondary markets are impossible in EVE due to lack of regulation.
You are correct that I am asking for a new market, but this is not a new good. It is the right to buy and sell existing goods in the future at a fixed price.
The fact that it is impossible for players to implement this, as you seem to concede, is the reason why we would have to ask ccp to do it.
When one buys something from the existing market you must pay the cost of the good listed by a seller. You cannot take the goods and not pay them. I am asking that the same logic be extend to a secondary market. This is not a new regulation.
The question then becomes how to implement these rules so that they are beneficial to all but not overly cumbersome. Heck I don't even have a problem with their being room to exploit, as is done with margin trading, as long as it doesn't break the market altogether. |
Elise DarkStar
DarkCorp Capital Group DarkCorp Imperium
142
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Posted - 2011.11.15 20:34:00 -
[4] - Quote
Never gonna happen.
Next. |
Lord Zim
Bat Country Goonswarm Federation
139
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Posted - 2011.11.15 20:39:00 -
[5] - Quote
So the fact that this kind of bullshit has been part in slumping the real world's economies wasn't enough, you want this **** in eve, too? |
OllieNorth
R-K Industries Sexy Alliance
13
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Posted - 2011.11.15 20:51:00 -
[6] - Quote
The issue with what you are proposing is that it is not a time-zero transaction. Having a CCP-controlled method for comitting to sell at a future date requires that the item be in your hangar. You would either have to lock the item down as soon as the option is bought, which essentially turns it into a zero-time transaction with a delayed delivery, or you would simply require it to be in the player's hangar at the time specified.
The latter is far trickier. In the Real World, it is enforced by contract law. If you default, you are held liable. In EVE, there is no system for recovery of damages. You either have the item or you don't. By implementing an option system, you would also have to implement a penalty system. At that point you are not only putting in a second market system, but you are coding a legal system, which is completely antithetical to the EVE philosophy so far. |
AureoLion
Etoilles Mortant Ltd. Solyaris Chtonium
33
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Posted - 2011.11.15 21:26:00 -
[7] - Quote
If the item isn't present, deduct galaxy average price +10%. Alt-exploiting would create so much inflation it wouldn't be funny. Hardlimiting it to SP, perhaps. Oh, and this isn't the bullshit. A manufacturer being able to lock on future prices for six months without having to put down capital is a pretty good thing for an economy. The bullshit begins when you trade currencies this way. |
Tasko Pal
Spallated Garniferous Schist
15
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Posted - 2011.11.15 21:47:00 -
[8] - Quote
Plato Idari wrote:
You are correct that I am asking for a new market, but this is not a new good. It is the right to buy and sell existing goods in the future at a fixed price.
You already have that "right" with other players. They don't have the obligation to deliver, of course.
And it is a "new" good since it is a derivative contract or security (depending on context).
Further, if we're talking about some sort of NPC assurance here, then that is incredibly exploitable. Imagine that the Goons had bought the right to purchase oxygen isotopes at a fixed price in the future and then pushed up the oxygen isotope market. Since they negated most high production and control most of the nullsec production, then who is left to procure it? Either the oxytope gets created out of nowhere or it is bought at whatever price exists on the market. The former means that the Goons need not even work to get more oxytopes to sell until their stash of futures runs out. The latter is game-killing with the possibility of selling oxytope for orders of magnitude more than the Goons buy it back at. That sort of isk-tsunami leads to hyperinflation.
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Fuujin
GoonWaffe Goonswarm Federation
45
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Posted - 2011.11.15 21:53:00 -
[9] - Quote
Tasko Pal wrote:Plato Idari wrote:
You are correct that I am asking for a new market, but this is not a new good. It is the right to buy and sell existing goods in the future at a fixed price.
You already have that "right" with other players. They don't have the obligation to deliver, of course. And it is a "new" good since it is a derivative contract or security (depending on context). Further, if we're talking about some sort of NPC assurance here, then that is incredibly exploitable. Imagine that the Goons had bought the right to purchase oxygen isotopes at a fixed price in the future and then pushed up the oxygen isotope market. Since they negated most high production and control most of the nullsec production, then who is left to procure it? Either the oxytope gets created out of nowhere or it is bought at whatever price exists on the market. The former means that the Goons need not even work to get more oxytopes to sell until their stash of futures runs out. The latter is game-killing with the possibility of selling oxytope for orders of magnitude more than the Goons buy it back at. That sort of isk-tsunami leads to hyperinflation.
Whoa whoa, you're going to be branded for that kind of heresy in MD. Remember, the Party line is "the goons have been totally ineffectual and have had no impact on oxytopes. This is a normal speculative wave. Nothing to see here." |
OllieNorth
R-K Industries Sexy Alliance
13
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Posted - 2011.11.15 23:29:00 -
[10] - Quote
::hand Fuujin her ThreadJack back::
Ma'am, it appears that you left this in this thread, the GoonOxyTope thread- ahem, epeen-waving - is thataway. |
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Plato Idari
TK Corp
0
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Posted - 2011.11.15 23:35:00 -
[11] - Quote
Lord Zim wrote:So the fact that this kind of bullshit has been part in slumping the real world's economies wasn't enough, you want this **** in eve, too?
You're thinking of Credit Default Swaps, a completely different thing.
OllieNorth wrote:You would either have to lock the item down as soon as the option is bought, which essentially turns it into a zero-time transaction with a delayed delivery, or you would simply require it to be in the player's hangar at the time specified.
This is actually probably a good way to go about doing it. This may seem silly but remeber you're buying and selling and option not a good, which means the buyer doesn't have to take it at the end date.
For example lets say we have a good 'A' which is trading on Jita between 98k and 102k.
Our Seller has 1000 units of 'A' that he wants to sell. He suspects the price of A is pretty stable, and doesnt expect he can get much more, or doesn't care to.
Our Buyer knows that in the future he will want 1000 units of 'A' but he doesn't have 98-102mil isk right now (or would rather use it on something else) but wants to lock in the price, so that he can be sure of his supply.
The Seller sells a "call" on the market for 5m he will sell the right for someone to buy his 1000 units of A for 100k each at some point before the option expiration date. (The option expiration date is often a date when all options expire)
The Buyer buys the call on the market for 5m this gives him the right to buy 1000 units of A for 100m from now till the next options expiration date.
Once the call is bought the Sellers 1000 units of 'A' are placed in a hold, and cannot move or sell them.
Possibility (A) Over the next month the buy and sell prices move more than 5k. The Buyer can now execute his option and buy what he needs to run his operations for 105m. For the intermediate month he has 100m more liquidity than he would have had had he bought it on day1, and he has no risk of not being able to run because the price spiked to 120k. The Seller might have been able to get 120m had he waited for today, instead but he gets 5m isk on day 1 and 100m today.
Possbility (B) The price falls more than 5k. The Buyer can now buy from the market for 90k, he chooses not to execute the option, and purchases today for 90m, his total cost is 95m 5m more than it would have cost him had he waited, but small price to pay for not having to worry about the risk that his supply would vanish. The seller has his goods unlocked at 5m in his pocket, he can now continue to wait for the price to go back up, sell another option, or simply sell today for 90m.
You might be asking why the Seller would do this? Possiblity (C) The Buyer could now try to buy at 98k each and save himself 2m for a total cost of 103m. The seller of the call now has 5m in his pocket and still has his goods which are worth what they were worth before. Or the Buyer could execute the option and spend a total of 105m.
A put order would work similarly with the seller of the put locking in his money and giving a producer a price floor on his goods.
This market now has two variables the cost of the option, and the price that the option executes at. Sorting by "cheapest" is no longer enough.
There's no trivial way to scam this system, though obviously you manipulate the price as option expiration day approaches. Option expiration days are usually set by an administrative structure, so we could call it the 30th of every month or have one once a quarter, etc.
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OllieNorth
R-K Industries Sexy Alliance
13
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Posted - 2011.11.15 23:41:00 -
[12] - Quote
Let's say I am a (horribly masochistic, aren't they all?) miner, and I want to drive up the price of my minerals. I buy every call I can get my hands on, locking up everyone's veldspar in this market for 30 days. Since it is locked up, nobody else can move it, and I can mark up my veldspar like a madman. On top of that, my competition, the other miners, have eleventy billion units of veld tied up for over a month and they are only being paid 5 mil a pop for it. When the options expire, the market is flooded with veld that they all have to re-list, and I can buy it all up at rock bottom prices.
That's how I can see it going wrong, and that is the problem with locking up items in EVE for a period of time. |
Plato Idari
TK Corp
0
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Posted - 2011.11.16 00:33:00 -
[13] - Quote
I think its highly unlikely that everyone would use the options market. In real life when more than 10% of a market is tied up in options its viewed as a strong sign that the price to buy or sell (depending on the option type). |
Zions Child
Odyssey Inc SpaceMonkey's Alliance
93
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Posted - 2011.11.16 01:31:00 -
[14] - Quote
Plato Idari wrote:I think its highly unlikely that everyone would use the options market. In real life when more than 10% of a market is tied up in options its viewed as a strong sign that the price to buy or sell (depending on the option type). Options trading is one of the reasons I don't trade as heavily in EVE as I otherwise would. I can only make profit if my assets increase in price.
Also, the problems you people are talking about are called "naked shorts" and other such things. Current regulations in the US are that you MUST have the shares, or be able to get the shares required for a short. They also do not allow a short to be taken advantage of unless the most recent tick was positive, e.g. you can't force the price down to rock bottom, buy a bunch of shares and sell them at your short price. |
Martosh Toma
Fraction Investment
0
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Posted - 2011.11.16 07:56:00 -
[15] - Quote
I disagree with your premisis that it is a flaw.
The eve market system is there to provide you with an opertunity to sell and purchase goods. Traders provide liquidety to the producers, and for that they take a cut of the profits.
It can be argued that speculators help move the prices to the equilibrium they will reach in time, and that they help identify shortages (and surplusses) before they occur. Thus helping producers shift their production in a timely manner, while also providing liquidity to the producers already providing the demaded product.
I fail to see what short selling and option trade add in this. There are only few production runs in eve that require such an investment in time and money that the producers feel the need to hedge their investment angainst a deteriorating market. Better yet for most of those such services already excist (for instance a deposit for a to be build super capital with a third party, ensuring purchase or forfaiting the deposit).
All you seek is a way to further profit from normal market swings. You ignore or downplay the possible risk of abuse and exploitation that will exsist besides the accepteble abuse and manipulation of the markets for profits.
These are, in my opinion, very much the things that caused the global economic problems we face today. Credit default swaps are only the latest tool made availeble, we were wrecking the world economy long before those were invented, even if it took more time.
Also you seek to move ccp to invest time into something that will only be used only by a minority of a minority of eve players, something that will allow that minority to profit more from a far greater group of eve players.
hmm, to me a far more intresting idear and use of developer ime would be to: disallow market access for non immedeate transactions from inside stations. Having each market ajustment give you the same counters as firing a gun (no docking/jumping for 1 minute) and allowing agression from any owner of an order you overbid or undercut (cheers for corperate orders).
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Lord Zim
Bat Country Goonswarm Federation
151
|
Posted - 2011.11.16 08:57:00 -
[16] - Quote
Plato Idari wrote:Lord Zim wrote:So the fact that this kind of bullshit has been part in slumping the real world's economies wasn't enough, you want this **** in eve, too? You're thinking of Credit Default Swaps, a completely different thing. Yes and no. Yes, you're probably right that CDS is the primary cause, but even the concept of selling something which you can't immediately cough up when asked to is what I was really referring to in this case.
In fact, this being a game, where you can just biomass or ignore a char if it's "burnt" is what really makes me go "um... no." about this. Hell, if you want a good reason for why you shouldn't ever consider looking into this kind of mechanism as an official addition to eve, just look at the amount of contract scamming going on. |
Doctor Invictus
Industry and Investments NZAU Alliance
0
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Posted - 2011.11.16 11:55:00 -
[17] - Quote
OllieNorth wrote:The issue with what you are proposing is that it is not a time-zero transaction. Having a CCP-controlled method for comitting to sell at a future date requires that the item be in your hangar. You would either have to lock the item down as soon as the option is bought, which essentially turns it into a zero-time transaction with a delayed delivery, or you would simply require it to be in the player's hangar at the time specified.
The latter is far trickier. In the Real World, it is enforced by contract law. If you default, you are held liable. In EVE, there is no system for recovery of damages. You either have the item or you don't. By implementing an option system, you would also have to implement a penalty system. At that point you are not only putting in a second market system, but you are coding a legal system, which is completely antithetical to the EVE philosophy so far.
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Block Ukx
Forge Laboratories
31
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Posted - 2011.11.16 12:02:00 -
[18] - Quote
Plato Idari wrote: The recent run up in PLEX and Oxygen Isotopes has exposed, yet again, that our markets have a big structural flaw.
A surge in price is not a structural flaw. Whithout it eve will be very boring.
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Alain Kinsella
8
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Posted - 2011.11.16 12:23:00 -
[19] - Quote
Elise DarkStar wrote:Never gonna happen.
Next.
This, unfortunately (I'm more interested in Short Sales actually, but they have the same mechanics issue).
Still, I agree that having CCP implement this would be so against Eve's core values that I'd be looking outside my window for flying pigs.
Best done by the players anyway. The trick, though, is figuring out who you can trust.
I may have come here from Myst Online, but that does not make me any less bloodthirsty than the average Eve player.
Just more subtle.
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Esan Vartesa
Samarkand Financial
49
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Posted - 2011.11.16 16:09:00 -
[20] - Quote
I can't even begin to explain why this idea is evil in a way that you can understand, but here goes.
All economic theory is based on the concept that price is determined by the optimal intersection of supply and demand.
Financial theory, on the other hand, is based on the concept that you can make a fortune by royally screwing markets with forces that have nothing to do with supply or demand. That fortune comes at the expense of actual market participants. Always.
It's theft, plain and simple. You want to steal from people? Fine, but you're going to have to do it yourself. In the real world, the mechanisms you're asking for only came into existence through centuries of influence-peddling, constant lying and manipulation, and great expense.
The Goons are way ahead of you on that front, I'm afraid. You want to twist the markets to your advantage, you're going to actually have to do the legwork. |
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Weaselior
GoonWaffe Goonswarm Federation
1617
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Posted - 2011.11.16 16:43:00 -
[21] - Quote
i wish we could ruin people who were shorting oxytopes itd own |
Weaselior
GoonWaffe Goonswarm Federation
1617
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Posted - 2011.11.16 16:44:00 -
[22] - Quote
i approve of this so we can make even more money on insider trading |
EliteProspector
2make2k
0
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Posted - 2011.11.17 23:51:00 -
[23] - Quote
To the OP: I think this is a great Idea. There are quite a few items I would take strong short positions and an options fulfillment system would enable that. I think this would have to be restricted to heavily traded highly liquid items to prevent abuse of essential areas of the game. |
Lord Zim
Bat Country Goonswarm Federation
160
|
Posted - 2011.11.18 00:17:00 -
[24] - Quote
Watch us manage to **** them up anyways. |
Kara Books
Hedion University Amarr Empire
8
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Posted - 2011.11.20 21:45:00 -
[25] - Quote
How about imposing a 3rd tax based on the amount the DEV's set the 0.00 average price for any given item for both sale's and buy orders?
Its not hard, I think with just a few min of practice, a well informed CCP employee can mod every single item value, each item taking 3 seconds to modify once per month?
Its just an idea thrown out there, in no way do I think its a perfect solution but maybe it might be of some use to some one out there. |
Tasko Pal
Spallated Garniferous Schist
15
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Posted - 2011.11.22 03:33:00 -
[26] - Quote
Esan Vartesa wrote:
It's theft, plain and simple. You want to steal from people? Fine, but you're going to have to do it yourself. In the real world, the mechanisms you're asking for only came into existence through centuries of influence-peddling, constant lying and manipulation, and great expense.
All market transactions and obligations are entered into voluntarily. You can have fraud and related stuff, but theft is not one of the problems of a market. |
David Forge
Forge Enterprises
0
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Posted - 2011.11.28 21:02:00 -
[27] - Quote
Esan Vartesa wrote:Financial theory, on the other hand, is based on the concept that you can make a fortune by royally screwing markets with forces that have nothing to do with supply or demand. That fortune comes at the expense of actual market participants. Always.
It's theft, plain and simple. You want to steal from people? Fine, but you're going to have to do it yourself. In the real world, the mechanisms you're asking for only came into existence through centuries of influence-peddling, constant lying and manipulation, and great expense.
This is an already implemented game mechanic.
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Adunh Slavy
Ammatar Trade Syndicate
108
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Posted - 2011.11.29 00:18:00 -
[28] - Quote
You can short ISK. |
TraderAlt 4153172618
Jovian Labs Jovian Enterprises
0
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Posted - 2011.11.29 20:26:00 -
[29] - Quote
I would love to be able to short, but it isn't going to happen because there is no good mechanism for forcing a character to pay out at a given date.
Unless you can find a solution that is simple/elegant CCP is not going to bother and you'll get no support here.
What you are asking for is a flying car. You know you want one, you know how cool it would be and all the great things you could do with it. But you have no idea how to actually make a car that flies, so you are asking CCP to figure it out for you.
What makes you think they can come up with a solution that 350,000 subscribers can't figure out?
Find a solution and the new CCP will work on it, but the fact that there is no mechanism to to set up a contract to be executed on a future date, that isn't prone to fraud, thwarts this idea at inception.
(As for your example, why would I as the seller want to hold a bunch of stock for only 5M when I could just sell it now? How is that of any benefit to me?) |
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