L$ Traders?!

Now that LindeX will finally have buy orders, who will be participating as a trader/L$ broker? It could be even more fun than trading on GOM, since there is a LOT more buying and selling taking place. The transaction fees are HUGE though. What kind of spread will we need to trade profitably and confidently with that kind of a transaction fee?

4% difference or about a 12-13 point spread. But I've never traded so perhaps you would need more than a 4% difference.

Yeah, I'll be trading....

SELL, SELL, SELL BABY!!!!!!

It will be no fun to trade if the only way the L$ continues to go is down...

HUH?!?! If you're convinced that it will only go down, then all of your trades will be a SURE THING! Sell high, buy lower. This is no fun? lol. I'm not convinced that the L$ won't be rebounding though. From 315 there's a lot of upside potential, especially with dwell being phased out.

Yeah, its no fun because you can't short.

There would be no trading for me... just selling.

There's no upside potential here. Have you seen the projected Federal Linden Dollar deficits? Christ, they make George W Bush's budget look good.

I think I'd want a bit more than 4% personally, with the cost of a round trip being (3.5% * price) + ($0.30 / price). ~0.5% wouldn't be enough for me to take on the risk. I'm curious as to what kind of margins everyone else will require before they'll enter the LindeX market as a trader and provide additonal liquidity though.

DIVE
DIVE
DIVE!!!!!!!!

Run silent, run deep captain!!!

Just selling? That's kinda silly. You can sell for a buck, buy for 99 cents, sell for 98 cents, buy for 97 cents, etc, and ride the nuclear missile almost the way down to ground zero, pocketing the difference on each trade! That's assuming that you're correct in your assumption that it will only go down, and all the way to zero. I think you're very wrong in that assesment.

No, no.... the Linden Federal Deficit is way too large.

I need to pick up the red phone and talk to Philip.

Stop trying to spin my thread on L$ trading. You've already got a thread on the "Federal Deficit", or whatever. Honestly, your viewpoints on the virtual economy have just been too extremist lately, even for me. And I'm not really known for walking the middle ground myself.

Extremist? No offense Mr. Fox, but read the numbers and weep. The deficit is just too large.

I'd perfer this thread to stay on topic. You've indicated that you have no intention to trade L$ on LindeX, although this thread was created so that those who DO intend to trade L$ on LindeX can chat about it. Thank you for this input, however unrequested it may have been.

Please proceed to the thread you've started on the "deficit" if you'd like to discuss the "deficit" farther. I will be happy to discuss it with you there, but this thread is for discussion of L$ trading on LindeX. Thank you in advance for understanding and assisting in my continued efforts to keep this thread ON TOPIC!

It seems to me the thing most people fail to mention is that although the total amount of Lindens in circulation is increasing, this is as a direct result of more and more new people coming into SL all the time. So even though the value of the Linden is falling (for the moment) the US income most people are making would stay relatively the same due to the increase of customers. I would even suggest people are making more now overall than they were 6 months ago when the Linden was around 265.

At the very least it's hardly a panic situation.

To get back to the thread topic, I'm certainly very curious to see how the new buy order functionality affects the Linden. Until the unfortunate announcement from Robin about the TOS changes, I felt the Linden was poised for a bit of a comeback.

I think the buy orders will help to absorb a lot of the current panic sales we're seeing without too much additional depreciation. Then, when the fundamental changes are complete (dwell is phased out entirely) we should see some sort of rebound. How much is anyone's guess. I think the days of the 250 rate are long over, though.

No, no, no.... yes, there are more people signing up for SL, but who knows how many actually stick around?

Yeah, there may be 221,xxx "members", but if there are only 30,000 players, then the money supply has grown at an outlandish rate!

I agree, I think if we had buy orders before Robin's announcement we wouldn't have seen a $20 rise in the Linden.

I don't know that we'll get back to 250 either but I think we'll see 280 again. It stayed very steady there for a while before the telehub land buyback drove the price up.

Then those people aren't contributing to the increase in Lindens at all. Basic accounts don't get stipends unless they log in.

All I know is I see newbies in my shop every single day. They are buying things.

The spread is the difference between the bid and ask (buy and sell). The idea is to post low buy orders and high sell orders (buy low / sell high).

Because of the round trip built in fee of 3.5% + 30 cents, you'll need a spread which is at *least* greater than that fee. Because the market also moves, you'll want the spread to increase beyond that before posting orders as a profit / safety margin.

Also, you can do different trades at different L$ amounts, for small amounts a spread of 6% is ok as you are risking very little if things jump around too much and your orders do not get filled.

For large amounts, you'll probably only want to trade if the spread is 10% plus. The larger the order, the higher the spread should be.

Hopefully Lindex will provide volume discounts to market makers .. that will encourage a lot of investment in the L$.

If the L$ is dropping, you can still make money (though not more money) just as if the L$ was increasing. They key is to be a market maker and to trade the spread, whether the L$ goes up or down.

You are impacted if the L$ makes sudden, volatile moves downwards that are not accounted for in your trading program. If that happens, then you'll most likely not get your sell orders filled. If it moves below the spread, then you'll end up either breaking even or at a loss.

Historically, the L$ has been fairly stable .. unfortunately, recently, the L$ has dropped in a very unnerving manner. I wouldn't trade the spread unless it was fairly large (30 L$+) or until the L$ calms down for a significant period of time.

We might see a short term jump in the L$ as people buy up L$ to trade with. If we get enough traders invested, we may see a more concerted effort to 'encourage' LL to have better monetary policies which could improve exchange stability longer term.

I'm thinking that 10% would be about the right margin for me to get involved and provide a liquidity service, regardless of order size. It's just too big of a gamble with those large fees. I can't see why that isn't a deposit fee rather than a selling fee.

SCAM, SCAM, SCAM BABY!!!!!!!

Shaun I will be trading as soon as open buy orders are available. There is too much money being traded for dumb exchange rates and with open buy orders even dumb trades will get a much better rate.

Yes, but how much better? I'm excited at the prospects, but I think the spread might end up too tight to make much (if any) money trading.

We need to see what the costs are first. About 30 minutes ago someone put up about 50K L$ at L$352/1 so I bought 45K L$ and am currently selling them at L$315 for about $10 profit. That is with a fix cost of $.30 per buy order so if we have to pay 3.5% on the buy side that wouldn't have made a profit and I wouldn't have tried it.

The costs will be the same, but my concern is that with access to limit orders open to everyone in SL, the spread will tighten up beyond the transaction costs.

I agree and that might bring some stability to the market. People wont ba able to make quick profits like my example and will have to speculate on the future direction of the market. It is going to be very interesting for me but maybe not for the oldtimers who remember what it was like before the Lindex.