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Thunderguts
Fusion Enterprises Ltd
Mostly Harmless
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Posted - 2007.11.22 00:08:00 -
[1]
Has short-selling been tried? Does it work?
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Daeva Vios
PhaseShifter Technologies
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Posted - 2007.11.22 00:15:00 -
[2]
I don't believe the market is active enough to make short-selling viable, yet.
That said, it would be a nice experiment 
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Thunderguts
Fusion Enterprises Ltd
Mostly Harmless
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Posted - 2007.11.22 00:16:00 -
[3]
I don't see any other posts on the topic. Just to clarify, short-selling means you borrow a commodity (not money) and sell it, hoping the price will go down so you can buy it back and repay the loan at a profit. Instead of "buy low, sell high", the idea is "sell high, buy low". Has anyone attempted this in EVE?
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Gin Sales
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Posted - 2007.11.22 01:55:00 -
[4]
I think it's an attainable option, as the market is easily manipulated, I don't see much popularity in it, from my point of view. I am willing to try it, though.
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Rethmynon
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Posted - 2007.11.22 02:06:00 -
[5]
Hmm I was discussing this exact topic at work today with my boss - I'm a Hedge Fund dealer in rl.
I have just started trading in Eve and I am frustrated that I can only buy things to sell later. Though, I am delighted arbitraging is a fundamental part of the market structure in this game, which I am looking forward to exploit.
My belief is that even if the game allowed for short selling, the markets are too small for it to work in the long term. CCP will have to put short selling limits in, otherwise people could do some serious damage to the markets if they are allowed to sell short billions worth of isk to effectively create a price crash on items.
I would love someone to prove otherwise as I will be right in there 
Reth
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Thunderguts
Fusion Enterprises Ltd
Mostly Harmless
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Posted - 2007.11.22 07:41:00 -
[6]
Seems you basically look for a commodity where there's a big gap between the highest buy order and the second-highest. Sell the entire quantity ordered to the higher one, then issue your own buy order a cent above the second highest one.
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Ulrich Sternaxe
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Posted - 2007.11.22 11:12:00 -
[7]
 Originally by: Daeva Vios
I don't believe the market is active enough to make short-selling viable, yet.
I think when I started this game about a year ago I saw a topic about someone who wanted to start an options/futures market for the mineralmarket. The mineralmarket is pretty active, especially the low end minerals.
Can't remember who it was who had that idea though, wasn't it Block Ukx who started that topic?
private investment plan |
Professor Bunsen
Optech Mineral Ventures
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Posted - 2007.11.22 12:33:00 -
[8]
Don't know about a post a year ago, but mineral traded options is me (Eve Index thread here). I'm running overdue on the market app due to bugfixing but it is close. You will soon be able to write as many calls options as your testicular fortitude and collateral will sustain.
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Kaaii
Caldari
Kaaii-Net Research Labs
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Posted - 2007.11.22 14:18:00 -
[9]
How does it work, exactly?
Example:.....
According to Oveur, existing LSAA's already anchored will stay there.
kieron
Director of Community Relations,
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Astorothe
Aperture Science Industries
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Posted - 2007.11.22 14:19:00 -
[10]
Originally by: Thunderguts
I don't see any other posts on the topic. Just to clarify, short-selling means you borrow a commodity (not money) and sell it, hoping the price will go down so you can buy it back and repay the loan at a profit. Instead of "buy low, sell high", the idea is "sell high, buy low". Has anyone attempted this in EVE?
Could you eloborate on that? I've never heard of this (my RL job has nothing to do with trade BTW :) ) but this sounds really neat.
Eve Web Design | PerthChat | Learning to Trade
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Meleil
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Posted - 2007.11.22 14:22:00 -
[11]
Edited by: Meleil on 22/11/2007 14:22:05
Originally by: Astorothe
Could you eloborate on that? I've never heard of this (my RL job has nothing to do with trade BTW :) ) but this sounds really neat.
If i'm understanding correctly... It means you borrow items from someone. Say large t2 arty's. You then sell them at 8 mil a piece hoping they drop in price. You then buy them back from the market at say 7.5 mil a piece and return the items to the person you borrowed them from. In the end that's 500k isk per item for you after you return the items to the one you borrowed from. It's interesting.
~Mel
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Syrec
Gallente
Aliastra
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Posted - 2007.11.22 14:40:00 -
[12]
You might be able to do it with new ships, otherwise I'm not sure the prices would fall enough.
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Havok Pierce
Gallente
D00M.
Triumvirate.
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Posted - 2007.11.22 17:40:00 -
[13]
You *might* be able to get away with it on a personal basis with loan contracts (with the use of collateral). This is theory though.
Originally by: CCP Wrangler
There's a Community petition category??
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Meleil
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Posted - 2007.11.22 18:24:00 -
[14]
This does have the potential to net people good isk if they're able to flood the market with specific items. Something I'm gonna consider doing...
~Mel
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Demitri Klashnikov
Amarr
Body Count Inc.
Mercenary Coalition
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Posted - 2007.11.23 01:23:00 -
[15]
Why would I want to loan you items, only to get them back when the price has dropped?
Very strange thing for me to do
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Toria Nynys
Minmatar
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Posted - 2007.11.23 02:16:00 -
[16]
I don't believe traditional shorting will ever appear in Eve. And definitely not on commodities.
In the real world shorting works because it's normaly done with stock certificates your brokerage loans you. They in turn have those certificates because margin buyers agree to have the brokerage hold their certificates.
Now, in Eve you'd have to first have some way of guaranteeing loans will be repaid. Second, you'll have to have some way of issuing a margin call when the collateral is no longer sufficient to cover. The first is the number one reason we don't have a real banking system either, btw.
Non-traditional shorting of commodities is possible, but very very hard. One variation is buying a particular tier3 BS, reprocessing, and selling some of the minerals. Other synthetic short positions are left to the frustrated reader.
While I'd love to have a real market, market makers, options and futures in the Eve market we'll just have to make do with what we got. And make our fancy trades in RL. =)
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Daedalus DuGalle
Gallente
University of Caille
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Posted - 2007.11.23 06:16:00 -
[17]
Edited by: Daedalus DuGalle on 23/11/2007 06:19:37
Idiot's guide to Short-selling
First of all short selling can only be done by a Dealer, not a Broker. The difference is that a dealer will actively take a position in a market and own the underlying asset (say, trit), while a broker simply brings two traders together (one to buy, one to sell) and takes a fee from the transaction. In RL most people are dealers, since a lot of brokers have been replaced by automated systems.
Anyway.
Short selling is the act of SELLING an asset BEFORE you own it by borrowing it off somebody who does own it. At some pre-arranged later date (or when the other guy wants to sell it himself) you must give the asset back. Thus you're betting that the price of the asset will go DOWN.
Example:
I think trit will go from 3isk to 2isk in one month's time.
I borrow 100mil trit off my client (say a director from a corp) and sell this trit on the open market for 3isk, or 300mil isk.
In one month's time (or when my corp needs the trit), I need to pay back that 100mil in trit by buying it on the open market and giving the physical thing back. Now we have one of 3 conditions:
1) If trit price < 3isk, then Profit . I sold at 3isk, bought back and returned at 2isk, profit = 100mil isk.
or
2) If trit price > 3isk, then Loss  . I sold at 3isk, bought back and returned at 4isk, Loss = 100mil isk.
or
3) If trit price = 3isk, then nothing happens.
Hence this is a form of speculation on the price fluctuations of the market. Currently EVE doesn't allow for bets against the value of an asset.
In my mind having futures (not forwards) contracts would allow for a better way to bet against price rises; they're easier to get started (don't need 100mil trit to start off with, also far easier conceptually) and the standardization makes them far easier to trade.
- What good is money if it can't inspire terror in your fellow man? |
YunFu Yan
Yan Enterprises
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Posted - 2007.11.23 08:35:00 -
[18]
This can not work in Eve for a simple reason: Lack of law enforcement.
In RL you are liable for loans you take. In Eve you are not.
Because of that, noone in Eve will loan out commodities without asking for a collateral. However, if you have the isk or items worth the isk then you may aswell use those to engage in buying instead of loaning.
Yan Enterprises - We mean business. |
Raaz Satik
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Posted - 2007.11.23 18:04:00 -
[19]
I agree with YunFu Yan. In real life, your broker will margin your account, ensuring that they don't lose money on your short position. If your account balance goes below a certain level they will liquidate your account, ensuring they don't lose money. In EVE it would be to easy for somebody to just take the money and run.
Originally by: Demitri Klashnikov
Why would I want to loan you items, only to get them back when the price has dropped?
Very strange thing for me to do
In real life you don't have a choice. Your broker lends it to somebody else without you knowing. They even charge a fee for it an keep the fee for themselves!
Question for all you RL stock market guru's out there. Person A owns a stock, while person B has shorted the same stock and borrowed it from person A. If the stock pays a dividend then person B has to pay person A the cash equivalent of the dividend. Question is what is the tax treatment of that payment? It's not a dividend because its actually coming from Person B and not from the company. (US dividends are taxed at a lower rate than interest) |
Calgorac
The Arrow Project
Morsus Mihi
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Posted - 2007.11.24 03:48:00 -
[20]
ttt
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