We have come to a point in our trading operations where we needed to re-evaluate where we will be dedicating large portions of our money to. When we first started, it was very feasible to focus on lower cost high volume items. However, as our funding grew, it became more and more challenging to manage large numbers of orders that would be enough to put most of the funds in play.
A recent strategic change we made was focusing on Plex and Skill Injectors. We did so well trading these items last week, that I wanted to expand on this and break down why we will be committing more energy to these items.
Let’s discuss a key concept that led to this decision. Velocity of money refers to how fast money passes from one holder to the next. In our case, we have been able to consistently trade, within one evening trading session, at least 10 Plexes and 20 Skill Injectors. That is approximately 20 billion isk worth of traded goods. Almost half of our funds are committed to these completed trades daily. Given the size of our wallet, we would be hard pressed to find stocks that can absorb that much isk and quickly resolve the trade.
Apart from the speed and amount of trades that can be covered using these items, there are other fundamental factors that make them very attractive.
Real Money Market – Plex cannot be manufactured. The only way for Plex to be introduced into the market is for someone somewhere to buy it with real money and then redeem it in game. Plex does not have the normal factors that would influence an item’s price. It has no material cost. Space assets changing hands have no bearing as well. The only things that can sway its price is the player base’s demand for “free” game time and the need to buy isk legally with real money. Along with very high and consistent daily volume, it takes a tremendous amount of force or cunning to manipulate this item, making it a predictable stock to play.
Micro-transaction Currency – Skill Extractors and Skill Injectors are new to the scene. Skill Extractors allow a player to draw 500,000 skill points from a character. This consumes the extractor and then becomes a Skill Injector. Depending on the number of skill points of the character you want to use this on will depend how much of the extracted 500,000 skill points you will receive.
Similar to the way Plexes do not enter the market until they are bought with real money, Skill Extractors do not enter the market until they are bought with Aurum. This currency is used to buy ship skins, avatar apparel, and other services as well. This new mechanic is popularly used as a means to passively make isk by having a dedicated character to farm skill points from. These skill point farmers, as a source material for the Skill Injectors, fuel the supply side of the equation. The resulting demand comes from low skill point characters that want to quicken their training time.
What makes these items very attractive and reliable stocks is that in-game events don’t have as much of a bearing on their market value as the number of concurrent users. War or not, players want to “play for free” and quickly train characters. War or not, some players would rather buy plex and sell them for isk than spend time they may not have grinding for it. War or not, players will take any advantage they can get over their competitors. It is in this desire that we find our profit.
Investment Group Update
Due to this very profitable week, we will be able to pay out 20% interest on the investment capital. I highly doubt this will be sustainable but we must ensure to pay out our investors in as favorable a manner as possible while still leaving funds aside for emergencies.
I am absolutely amazed at our progress. We must be ready to adjust strategies as the trade wallet develops. We must ensure that we are utilizing as much of the funds as possible, so that we have a healthy commitment to the market. Otherwise, we will surely miss out on opportunities.
Feel free to make suggestions concerning future market commitments. As our funds grow, we might find ourselves in a position where we need to find more advanced investments. Keep your eyes open to the possibility of supporting other player operations, just as you did mine.
In order to support further observation and intelligent decisions on Plex and similar products, I created a portfolio to track and correlate prices. The picture above is a snap shot from the portfolio function available from Eve Mogul.
Using this valuable tool, I hope to be able to find patterns between the items and identify potential price swings. Due to the Skill Extractors and Skill Injectors being recent additions to the market, there isn’t much history to draw from. However, this should not prevent observations of known patterns similar to other item sets in the game such as T3 Cruisers and their respective subsystems or modules that can only be used with certain ships.
If you are an Eve Mogul user, I highly recommend using this tool for your trade decisions. The more you are aware of the relationships of items and their corresponding prices, the better you will be able to extract profit from these trades.
Now let’s see how we did this trade week.
To no surprise, Plex and Skill Injectors top our chart. You will also notice that we had some action on +5 attribute implants. I took a gamble on these seeing as they are related to making efficient skill point farming characters. I will continue to play these items as they show very favorable spreads throughout their history.
The greatest lesson from the week comes from the observation of the interconnectivity of several items. These items have relationships that give you an idea of how stable their prices may be or how they tend to follow the pricing pattern of related items.
Now that I’ve gained some experience on this aspect of trading, I must expand this observation to include raw material – component – finished product relationships. Although trading on raw materials may not be feasible due to the necessity to pay out investors weekly, it may be worth it to set aside some funds for proper mid to long term investments again. At the very least, making smaller isk commitments to such trades will give us working information that may lead us to include such strategies in the future.
Thanks for reading. Good luck and happy trading.