Trading Versus A Teen Market

[MRoss]

So we all have our little hobby. Some people play ball, others play Call of Duty. I play Battleforge. It's a very awesome game I have been playing for the past three years. It is similar to World of Warcraft, however, the units you use are cards that you buy from the in-game auction house (similar to Magic the Gathering). The auction house charges a fee so small to list auctions that there are essentially no transaction costs.

I am not a genius trader by anyone's imagination. Yet, I paid all of $5 to buy 3,000BFP (the in-game currency), and I have traded this to close to 500,000BFP (Yes I realize my account is worth almost $1,000 now). I rarely play the actual game now, I'm having such a great time controlling the markets.

It's very interesting in a world that has a LARGE percentage of the market players not having any idea what they are doing and making stupid trades consistently. I just find it fascinating.

Side point: A majority of my trades are done OTC so not only do I avoid all fees entirely but I get amazing prices.

It's pretty cool; but it would be interesting to see what would happen if some real quants joined in the madness. I wonder what that would do to the in-game economy.

To give you a small estimate; I would guess that there are roughly 3,500 active players in total in this game, and judging from experience about 100 relatively smart traders.

 

[Lyosha]

real quants? Nothing. There is no magic formula that makes money. Quants are just risk managers at various temporal thresholds.

Real traders? They would get bored and go back to the real markets.

 

[Zaighum Rajput]

Sounds like an interesting idea!
What exactly do you mean by, "...traded this to close to 500,000BFP?"

 

[Yike Lu]

https://en.wikipedia.org/wiki/Emergent_gameplay#Game_financial_institutions

The problem is, as Lyosha obliquely put it, scale. Opportunity cost.

 

[MRoss]

Real traders? They would get bored and go back to the real markets.

Yes of course, I meant traders not quants. Apologies.

The problem is, as Lyosha obliquely put it, scale. Opportunity cost.

I guess.

Sounds like an interesting idea!
What exactly do you mean by, "...traded this to close to 500,000BFP?"

When I saw cards that usually traded for 500BFP driven down by supply to 200BFP, I would buy them all out and release them slowly at 500-600. And other such similar tactics.'

Was/is very fun.

 

[AndrewChang]

Yes of course, I meant traders not quants. Apologies.



I guess.


When I saw cards that usually traded for 500BFP driven down by supply to 200BFP, I would buy them all out and release them slowly at 500-600. And other such similar tactics.'

Was/is very fun.

"the market can stay wrong longer than you can stay solvent."

Would you buy BBRY after tanking 25%+ today?

 

[MRoss]

"the market can stay wrong longer than you can stay solvent."

Would you buy BBRY after tanking 25%+ today?

This market is just a wee bit smaller then the NASDAQ or NYSE .

To put it in perspective, I have the relative worth of about 10 Warren Buffets...

 

[AndrewChang]

This market is just a wee bit smaller then the NASDAQ or NYSE .

To put it in perspective, I have the relative worth of about 10 Warren Buffets...

I was just hoping you said you would buy BBRY as an indicator I should buy it ...

 

[MRoss]

So I have a nice riddle for you guys.

This game market has two types of cards: regular and promotion cards which were only given out to a few people when the game was released. For example, a "Harvester" is worth 3000 points, while a Promo Harvester is worth 40,000.

News just broke that in 2 months the game will be retired forever.

What do you think will happen to the price of Promo cards? Will they plummet? Spike? Stay the same? Remember, basically everything is worthless since the game will end in 2 months.

Answer based on your market experience. Let's see who is most accurate. Also, provide some reasoning. I am curious.

 

[JesseLevermore]

These dollars are about to be worthless. Expect all prices to spike to levels idk since idk how currency is created/how much currency there is in the economy.

But if there is utility gained from having items you would clearly expect players to take the items since you get punished for saving in 2 months time.

 

[JesseLevermore]

I also completely disagree with the people who said there were better ways to spend your time. Systems like these are simplified economies where you can get a great idea for consumer behavior without complexities (i.e. taxes/open economies/tariffs....). There is no way you could be a smart trader and think a game with this auction system is irrelevant.

 

[MRoss]

The results so far have been very interesting.

First few days after news broke
Regular cards: On average dropped to about 80% of their true market value.
Promo cards: On average dropped a whopping 60% to about 40% of their true market value.

After about one week of this insanity things have calmed down
Regular cards: Remain at about 80% true market value.
Promo cards: Now trading at about 60% of true market value.

This is all very interesting since the currency itself will be worthless in about 6 weeks so I don't understand why card values would drop so much.