Jet Jettix
Minmatar
The Suicide Kings
FOUNDATI0N
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Posted - 2007.12.18 14:21:00 -
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I was actually considering something along the lines of this as a Market Manipulation trick, only yesterday.
The most basic rule of markets and trade is:
Supply and Demand. When the Supply meets the demand of the market, the price is stable. When the supply is higher than the demand, the price drops. When the Demand is higher than the supply, the price increases.
My idea was based on this, just considering minerals.
Basically I was thinking, that if you start ammassing minerals in huge quantities (the method is irrellevant, you can have a mining corp mine for a couple of months or just buy huge stocks of it), then seed the minerals in huge quantities to the market, at say 50% the price of what it would cost normally. This would result in other competitors having to undercut their previous price by a lot to sell their stock. You can then buy as much of the available minerals on the market as possible for the money you have earned undercutting everyone. Because supply is larger than demand, supply have to drop to allow people to make profit, but supply is irrelevant as long as you control enough of the available stock on the market and keep selling it cheap.
The situation that comes out of this can be called a crash, since several of the players in the market will be turned away from a seemingly unprofitable market environment, and in eve this can happen quickly, meaning you have to sell less of your stock, and sell less of your stock for a potential loss. When you have decieded that enough competitors have been turned away and that you have gained enough of the previously available stocks (sold before the market crash), you stop seeding the market with minerals, and hopefully demand will be bigger than supply, leading to a rise in price, perhaps 200%-300% of the price before the crash. This is when you start selling your left over stock for a profit (the best possible outcome is that you have a larger stocks of minerals than when you started), keeping the price high. The other competitors who stuck it out during the crash will certainly also make a profit, and those who quit during the crash will come back, and slowly bring supply and demand back into balance, but by this time you have hopefully made enough of a profit for this to have been worth it.
I imaging that a similiar scheme can be made on the early T2 invention market, especially if people are selling the BPs for 0 return.
Anyways, I am not a Trader, only a humble PVPer, without a real knowledge on how the market works.
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