Second Life Forums Archive - LindeX market timing

Argos Hawks

Eclectically Esoteric

Join date: 24 Jan 2007

Posts: 1,037

11-28-2008 14:49

From: Elanthius Flagstaff

I'm almost certain Supply Linden does not do market sells. As for your other stuff, it's all true and I wrote a little program that does it automatically for me for any money I happen to have spare. Usually takes about a week for a full round trip though.

I've been trying to work up the energy to create a program where lots of people can donate tiny amounts of money to me and I'll process it through the LindeX and pay them back the principle and the 5% profit after each round trip. Probably would get into trouble for being too bank like though.

If Supply Linden was doing Limit Sells, there would be a backlog created on the sell side whenever he dumps a bunch. When Supply Linden is out of action for a while, the backlog builds up on the buy side.

That's 0.5% profit per round trip, not 5%.

_____________________

Step 1: Create virtual world
Step 2: ???
Step 3: Profit

Elanthius Flagstaff

Registered User

Join date: 30 Apr 2006

Posts: 1,534

11-28-2008 14:59

From: Argos Hawks

If Supply Linden was doing Limit Sells, there would be a backlog created on the sell side whenever he dumps a bunch. When Supply Linden is out of action for a while, the backlog builds up on the buy side.

No, when Supply Linden is out of action we blow right through the sell side and the value of the L$ increases because he's not propping it up with his massive limit sell. I would assume most transactions in the LindeX are from people buying Lindens with market orders, a lot of it probably through the button on the viewer. If Supply Linden was hitting the Buy side then all those market buys would just continue to hammer right through the sell side and down to zero.

_____________________

Visit http://ninjaland.net for mainland and covenant rentals or visit our amazing land store at Steamboat (199, 56).

Also, we pay L$0.15/sqm/week for tier donated to our group and we rent pure tier to your group for L$0.25/sqm/week.

Free L$ for Everyone - http://ninjaland.net/tools/search-scumming/

Argos Hawks

Eclectically Esoteric

Join date: 24 Jan 2007

Posts: 1,037

11-28-2008 16:37

From: Elanthius Flagstaff

No, when Supply Linden is out of action we blow right through the sell side and the value of the L$ increases because he's not propping it up with his massive limit sell. I would assume most transactions in the LindeX are from people buying Lindens with market orders, a lot of it probably through the button on the viewer. If Supply Linden was hitting the Buy side then all those market buys would just continue to hammer right through the sell side and down to zero.

The limit sells will always get taken up because many people will find a reason to buy immediately no matter what is going on in SL or RL. The limit buys build up because people that are selling can usually afford to wait a day or two. When we see a big drop in the outstanding limit buy orders, that means that either Supply Linden dumped a bunch or that there's someone out there that sells as much as Supply Linden while being too stupid to realize that they could get a much better rate. It is a rare occasion that I would discount the stupid person option, but in this case the person has to be financially savvy enough to build up that huge supply of lindens in the first place. As soon as a big market sell order goes through to clear out the limit buys, there's a corresponding increase in limit sells as the money flippers put in their orders to complete the round trip.

Unless you've got some insider information that you'd like to disclose, I'd be willing to bet a week's pay that I'm right. Either way I enjoy the conversation and watching how the market reacts when the big orders go through.

_____________________

Step 1: Create virtual world
Step 2: ???
Step 3: Profit

Darkness Anubis

Registered User

Join date: 14 Jun 2004

Posts: 1,628

11-28-2008 17:25

From: Argos Hawks

Sell L$1million at 262 with a 3.5% fee, and you'll get US$3683.20.
Buy L$ at 273 with US$3682.20 and a 30 cent fee, and you'll get L$1,005,431.
That's a 0.5432% profit.

Sounds like it's not worth doing, but lets look further. When Supply Linden is doing his thing and keeping the people on the buy side happy, you can turn that around a couple times a week. Compound that interest 100 times in a year, and you get 71.88% annual profit. Occasionally you'll miss a couple weeks while Supply Linden takes a nap. Sometimes the market will shift by L$1 and you'll lose the value of your last flip, but even if you only average 1 flip per week the annual profit will be 31.1%. Compare that to your RL portfolio.

This is why there's always a ton of people on the limit buy side waiting for Supply Linden to do a huge market sell.

Actually thats pretty much what I did for a couple of years. Now I am not comfortable with that much US$ value on my account and got it out. When I say not worth it I mean from a risk standpoint.

_____________________

Damanios Thetan

looking in

Join date: 6 Mar 2004

Posts: 992

11-28-2008 17:31

I guess I should hire an SL accountant and portfolio manager...

_____________________

FD Spark

Prim & Texture Doodler

Join date: 30 Oct 2006

Posts: 4,697

11-28-2008 17:42

I keep eye on it but more out of boredom but I don't totally get it yet but I was
quite tempted to buy when I saw some on sell for 270 for 1 usd and over bit back took
me bit to figure out I would have saving of 4 dollars compare to just buying straight
out and that bottom of screen has best buy prices but I wasn't quite sure if I was
reading it right last week.
I check usually once or twice a month.

_____________________

Look for my alt Dagon Xanith on Youtube.com

Newest video is

Loneliness by Duo Zikr DX's Alts & SL Art Death of Avatar

Something Something

Something Estates

Join date: 26 Sep 2006

Posts: 121

12-01-2008 18:43

From: Argos Hawks

Unless you've got some insider information that you'd like to disclose, I'd be willing to bet a week's pay that I'm right. Either way I enjoy the conversation and watching how the market reacts when the big orders go through.

When Supply Linden was first created, it was announced on the blog that:

"Sales will not be market-sale orders. Supply Linden will list only limit-sell orders. We will not sell Linden Dollars through market-sell orders."

See
http://blog.secondlife.com/2006/07/17/linden-dollar-economy-announcement/
http://blog.secondlife.com/2006/08/31/linden-dollar-economy-update-1/

Does this still apply? I don't know.

Porky Gorky

Temperamentalalistical

Join date: 25 May 2004

Posts: 1,414

12-02-2008 05:47

I tend to always have a few opportunistic limit sales set up at good prices on the off chance. Week to week the bulk of my profit is put up for sale mid week and sells on a weekend at the current average price. As Christmas approaches though I will I break my usual process and start watching Lindex closely every day in order to get the best prices. People's online habits change during holidays, especially Christmas, so it's hard to predict Lindex and doubly hard to predict in world sales in advance. Times like these I wish I was an estate manager as I bet it is allot easier to forecast profit compared to selling content. December 2006 was a phenomenal month for me. December 2007 was one of my worst months ever. So I really have no idea what to expect from sales this month so I have taken on a custom sim build just in case sales are poor.

_____________________

Lear Cale

wordy bugger

Join date: 22 Aug 2007

Posts: 3,569

12-09-2008 13:32

From: Gordon Wendt

It probably won't since the only reason that the L$ > USD rate isn't 1:1 or less is that they (LL) artifically prop it up since in a free market it would never stay this high both because of the imbalance in sinks vs sources and because the L$ is the fiat currency of all fiat currencies in that like the USD it's a fiat currency but it doesn't have a whole government backing up that a dollar is a doller it just has one company saying that an L$ is an L$.

Full disclosure on this, I am openly pro free marketing it even if that means rebalancing sinks and sources since I only sell L$ and, except for maybe once, never buy it but LL will never do this because A) they make a substantial amount of money selling L$ which they can of course create for free, and B) because even assuming sinks and sources were equalized because of my reasoning on fiat currencies above the natural inclination would be for it to lose (buy) value vs the dollar which would lead to massive inflation and which would make it harder for people to buy L$ to spend in world.

I look at it a different way. If LL keeps the exchange rate steady by changing the Linden supply, this means that the Linden supply will tend to be at the right level. Of course, I'm assuming a stable $US, which is laughable. Might be better if they kept the rate steady compared to an index of the significant world currencies.

If the SL economy goes to hell in a handbasket and LL keeps the exchange rate steady, it'll hurt them somehonw (e.g., having to buy back too much $L and losing money that way). If the exchange rate shoots up, that might be an indicator that something's afoot such that they can't stabilize the rate at an acceptable cost, which won't be a good sign.

I can't think of an economic disaster that would cause the rate to plumment (meaning, those of us with an ingame balance would win big time, but only one big windfall because Buffy won't be buying her new skin for US$1K!)

LindeX market timing
Argos Hawks Eclectically Esoteric Join date: 24 Jan 2007 Posts: 1,037	11-28-2008 14:49 From: Elanthius Flagstaff I'm almost certain Supply Linden does not do market sells. As for your other stuff, it's all true and I wrote a little program that does it automatically for me for any money I happen to have spare. Usually takes about a week for a full round trip though. I've been trying to work up the energy to create a program where lots of people can donate tiny amounts of money to me and I'll process it through the LindeX and pay them back the principle and the 5% profit after each round trip. Probably would get into trouble for being too bank like though. If Supply Linden was doing Limit Sells, there would be a backlog created on the sell side whenever he dumps a bunch. When Supply Linden is out of action for a while, the backlog builds up on the buy side. That's 0.5% profit per round trip, not 5%. _____________________ Step 1: Create virtual world Step 2: ??? Step 3: Profit
Elanthius Flagstaff Registered User Join date: 30 Apr 2006 Posts: 1,534	11-28-2008 14:59 From: Argos Hawks If Supply Linden was doing Limit Sells, there would be a backlog created on the sell side whenever he dumps a bunch. When Supply Linden is out of action for a while, the backlog builds up on the buy side. No, when Supply Linden is out of action we blow right through the sell side and the value of the L$ increases because he's not propping it up with his massive limit sell. I would assume most transactions in the LindeX are from people buying Lindens with market orders, a lot of it probably through the button on the viewer. If Supply Linden was hitting the Buy side then all those market buys would just continue to hammer right through the sell side and down to zero. _____________________ Visit http://ninjaland.net for mainland and covenant rentals or visit our amazing land store at Steamboat (199, 56). Also, we pay L$0.15/sqm/week for tier donated to our group and we rent pure tier to your group for L$0.25/sqm/week. Free L$ for Everyone - http://ninjaland.net/tools/search-scumming/
Argos Hawks Eclectically Esoteric Join date: 24 Jan 2007 Posts: 1,037	11-28-2008 16:37 From: Elanthius Flagstaff No, when Supply Linden is out of action we blow right through the sell side and the value of the L$ increases because he's not propping it up with his massive limit sell. I would assume most transactions in the LindeX are from people buying Lindens with market orders, a lot of it probably through the button on the viewer. If Supply Linden was hitting the Buy side then all those market buys would just continue to hammer right through the sell side and down to zero. The limit sells will always get taken up because many people will find a reason to buy immediately no matter what is going on in SL or RL. The limit buys build up because people that are selling can usually afford to wait a day or two. When we see a big drop in the outstanding limit buy orders, that means that either Supply Linden dumped a bunch or that there's someone out there that sells as much as Supply Linden while being too stupid to realize that they could get a much better rate. It is a rare occasion that I would discount the stupid person option, but in this case the person has to be financially savvy enough to build up that huge supply of lindens in the first place. As soon as a big market sell order goes through to clear out the limit buys, there's a corresponding increase in limit sells as the money flippers put in their orders to complete the round trip. Unless you've got some insider information that you'd like to disclose, I'd be willing to bet a week's pay that I'm right. Either way I enjoy the conversation and watching how the market reacts when the big orders go through. _____________________ Step 1: Create virtual world Step 2: ??? Step 3: Profit
Darkness Anubis Registered User Join date: 14 Jun 2004 Posts: 1,628	11-28-2008 17:25 From: Argos Hawks Sell L$1million at 262 with a 3.5% fee, and you'll get US$3683.20. Buy L$ at 273 with US$3682.20 and a 30 cent fee, and you'll get L$1,005,431. That's a 0.5432% profit. Sounds like it's not worth doing, but lets look further. When Supply Linden is doing his thing and keeping the people on the buy side happy, you can turn that around a couple times a week. Compound that interest 100 times in a year, and you get 71.88% annual profit. Occasionally you'll miss a couple weeks while Supply Linden takes a nap. Sometimes the market will shift by L$1 and you'll lose the value of your last flip, but even if you only average 1 flip per week the annual profit will be 31.1%. Compare that to your RL portfolio. This is why there's always a ton of people on the limit buy side waiting for Supply Linden to do a huge market sell. Actually thats pretty much what I did for a couple of years. Now I am not comfortable with that much US$ value on my account and got it out. When I say not worth it I mean from a risk standpoint. _____________________
Damanios Thetan looking in Join date: 6 Mar 2004 Posts: 992	11-28-2008 17:31 I guess I should hire an SL accountant and portfolio manager... _____________________
FD Spark Prim & Texture Doodler Join date: 30 Oct 2006 Posts: 4,697	11-28-2008 17:42 I keep eye on it but more out of boredom but I don't totally get it yet but I was quite tempted to buy when I saw some on sell for 270 for 1 usd and over bit back took me bit to figure out I would have saving of 4 dollars compare to just buying straight out and that bottom of screen has best buy prices but I wasn't quite sure if I was reading it right last week. I check usually once or twice a month. _____________________ Look for my alt Dagon Xanith on Youtube.com Newest video is Loneliness by Duo Zikr DX's Alts & SL Art Death of Avatar
Something Something Something Estates Join date: 26 Sep 2006 Posts: 121	12-01-2008 18:43 From: Argos Hawks Unless you've got some insider information that you'd like to disclose, I'd be willing to bet a week's pay that I'm right. Either way I enjoy the conversation and watching how the market reacts when the big orders go through. When Supply Linden was first created, it was announced on the blog that: "Sales will not be market-sale orders. Supply Linden will list only limit-sell orders. We will not sell Linden Dollars through market-sell orders." See http://blog.secondlife.com/2006/07/17/linden-dollar-economy-announcement/ http://blog.secondlife.com/2006/08/31/linden-dollar-economy-update-1/ Does this still apply? I don't know.
Porky Gorky Temperamentalalistical Join date: 25 May 2004 Posts: 1,414	12-02-2008 05:47 I tend to always have a few opportunistic limit sales set up at good prices on the off chance. Week to week the bulk of my profit is put up for sale mid week and sells on a weekend at the current average price. As Christmas approaches though I will I break my usual process and start watching Lindex closely every day in order to get the best prices. People's online habits change during holidays, especially Christmas, so it's hard to predict Lindex and doubly hard to predict in world sales in advance. Times like these I wish I was an estate manager as I bet it is allot easier to forecast profit compared to selling content. December 2006 was a phenomenal month for me. December 2007 was one of my worst months ever. So I really have no idea what to expect from sales this month so I have taken on a custom sim build just in case sales are poor. _____________________
Lear Cale wordy bugger Join date: 22 Aug 2007 Posts: 3,569	12-09-2008 13:32 From: Gordon Wendt It probably won't since the only reason that the L$ > USD rate isn't 1:1 or less is that they (LL) artifically prop it up since in a free market it would never stay this high both because of the imbalance in sinks vs sources and because the L$ is the fiat currency of all fiat currencies in that like the USD it's a fiat currency but it doesn't have a whole government backing up that a dollar is a doller it just has one company saying that an L$ is an L$. Full disclosure on this, I am openly pro free marketing it even if that means rebalancing sinks and sources since I only sell L$ and, except for maybe once, never buy it but LL will never do this because A) they make a substantial amount of money selling L$ which they can of course create for free, and B) because even assuming sinks and sources were equalized because of my reasoning on fiat currencies above the natural inclination would be for it to lose (buy) value vs the dollar which would lead to massive inflation and which would make it harder for people to buy L$ to spend in world. I look at it a different way. If LL keeps the exchange rate steady by changing the Linden supply, this means that the Linden supply will tend to be at the right level. Of course, I'm assuming a stable $US, which is laughable. Might be better if they kept the rate steady compared to an index of the significant world currencies. If the SL economy goes to hell in a handbasket and LL keeps the exchange rate steady, it'll hurt them somehonw (e.g., having to buy back too much $L and losing money that way). If the exchange rate shoots up, that might be an indicator that something's afoot such that they can't stabilize the rate at an acceptable cost, which won't be a good sign. I can't think of an economic disaster that would cause the rate to plumment (meaning, those of us with an ingame balance would win big time, but only one big windfall because Buffy won't be buying her new skin for US$1K!)

Welcome to the Second Life Forums Archive

LindeX market timing