What limited buy means for YOU

Ever wonder what the new "limited buy" feature means for you? Well, here is how I sofar observe it:

1. You either now must compete with day traders when placing your sell orders
2. Or you give up and sell at dump prices to the limited buy orders of the day traders

Of course day trader will not get rich either, as most their margin are use up for the fees and competition is fierce.

Your thoughts?

What I say or do won't matter much but I will say better be careful with those puppets. Sooner or later thier strings will get tangled.

Thats what I thought I was going to see Anshe, and I was looking forward to some great fun with all the avators moaning about pulled, fake, bot, and other orders

http://images.advfn.com/imagesnew/2/gb/gfxbrochures/s_l2_basic.gif

But sad to relate it is not to be

I think it will become abundantly clear what SL residents are willing to pay for $L, rather than what sellers want to sell for. Maybe the $L value has been way off all along!

What some people haven't gotten their grasp on was that the linden is only worth what the buyer is willing to pay.

I'm boycotting the lindex, so those lindens are worth nothing to me. But I've already seen someone complaining about 'being forced to meet the buyer's price.' Boohoo, thats econonomics 101.

Money traders had always been there, just that in the old days there was no standing indicator like the limited buy.

More importantly... It means more compeition for SLExchange.

I think maybe I did not make my point clear.

Before "limited buy": Seller sells to buyer, Linden Lab get 3.5% transaction fee

After "limited buy": Seller sells to trader, trader sell to buyer and Linden Lab get 7% transaction fee

How do this help people who want buy L$ cheap?

I can see this being very badly abused. "traders" will post rediculously low buy amounts, get matched and then limit sell them at a higher rate (though it may take some time) and make a huge profit. Too bad the money hungry have to continue to ruin a good thing for the majority.

*ahem* Beg to differ.

In the *old* days, there existed market and limit buy and sell orders, with an ask-offer spread of roughly L$2/US$. The current fee structure is *not* set up in such a way as to converge on a "fair market value" in more than a ballpark fashion.

If people want to buy a cheaper Linden, it's much easier now I would think. Let's say the "buy now" rate at the moment it 325L/$ and you want to instead buy for 335L/$. Well, you deposit a little money into your account and then you put up a buy order at 335L/$. That's probably going to put you right in the middle of the spread, day traders won't undercut you because they won't be able to resell it at a profit. Most likely that order will fill during the day and you just bought Lindens 3% cheaper than you would have had to pay without limit buys.

Anshe, if you can't figure out how to get the most out of Lindex, maybe you need to hire someone who does get Lindex to sell your Lindens for you.

Sorry I wasn't here when GOM was here.

My comment was base on what Lindex was.

Keike well done, spot on.

The only trouble is I would prefer to see a live sets type book, now that would be fun.

Here you cannot "see" both sides of the book, therefore you are going to need to plan stratergy before disposing of a large number of Lindens.

Anshe.....it is called "distribution" For example my girl if you have a large number of Lindens (say 1 million or so to sell) what you would do is to create buying demand for Lindens, the easy way for you would be to have a land sale, say half price for 1 day for example.

Then sit in front of the screen, refreshing it, while finely judging purchased Lindens vis-a-vis you selling Lindens into the demand (which will hopefully make a turn for you on an improved exchange rate) and then when you have sold out, finish the land sale, and finally raise prices.

OMFG!!!! Please please please don't boycott Lindex.... you will singlehandedly drive the price down... I beg you to reconsider!!!!!

You are completely wrong. The limited buy orders are only charged a one time fee of $.30 regardless of the quantity and if no L$ is bought the fee is refunded upon cancellation.

No, I am right. The day trader will get charge 3.5% when he finally has to sell the L$ again. This mean Linden Lab first get 3.5% when content creator sell to trader and another 3.5% when trader sell to consumer.



I know how to get the most out of LindeX: I would just need hire 2 students in China who will camp LindeX day and night as day trader. Then Linden Lab take two times 3.5% on most L$ that change hand from creator to consumer, I earn maybe 0.2% and everbody else foot the bill. Do you want me to that?

The transaction costs hurts me...3.5% is REALLY much

Simply use robot traders - it's quite simple to code .

I have a feeling you say that a lot.
Sounds like a better deal than at your website. You buy 100,000 lindens for $280. And then sell them in blocks of 2000 for $7.99. If you sell 100,000 lindens at that rate, you make $399.50, a markup of 43%.

Give it a try, you'll be providing a valuable service for the rest of us, making the Linden market more liquid at a huge personal risk. Personally, I don't think you can do it.

Let's look at this logically:

a. Seller (content creator, real estate developer, etc) sells Linden's to trader: they are charged a 3.5% fee
b. Trader sells same Lindens to whomever: they are charged a 3.5% fee
c. Whoever sells same Lindens to Whomever: they are charged a 3.5% fee
d. Etcetera

So far, it adds up to 10.5%. In fact, each Linden can be sold many times so the fee LL gets could be over 100%. Therefore, eventually the Lindex will list negative Lindens.


WAIT...it does not work that way, Anshe. The fee is not additive. It is a one time fee for EACH sale cycle. A seller can only sell his or her Lindens once per cycle. The most that can accure in the cycle (seller to buyer) is 3.5% of the sale price + $0.30 USD. That's it.



If it makes good business sense for you, then you should do it.

That huge profit you're talking about is about $900L on a $100,000 trade right now.

No, again you are wrong because you assume that that the day trader will sell to LindeX buyers but they are much smarter than you think and many of them have moved the L$ to SLX where they don't pay any commision. Before the Lindex limited buy orders were instituted there was between L$100,000 and L$250,000 offered for sale. Now there is over L$1 million offered for sale and I don't know how much has already been bought.

Wow, good catch Anshe.

You are right, day traders are adding another 3.5% fee into the process.

You pay a commision on SLX .. read the fine print. Just because the 'spread' doesn't go to the buyer or seller, it is still getting charged. You're just splitting it.

At the end of the day, because day traders are doing round trip on money which used to only take one trip, L$ is getting billed twice.

Here's an example for those still not convinced:

Say someone gets 500 L$ stipend and buys something from me for 500 L$ and then I sell it on the lindex .. I get charged 17.5 L$.

Now, let's say I sell it on the market (yhou have to have a market sell) and it gets picked up by a day trader instead of someone who wants to buy my 500 L$ to buy someone elses gizmoid.

I get charged 3.5% .. that money is still not in the hands of someone who wants it.

So I fill the buy order of that day trader, and then they go and post a sell transaction and they get charged 3.5%.

You have to make a market sell in order to get charged 3.5% twice (which makes sense, because you're selling at the buy price which is much larger than the current sell price).

However, everytime you do a market sell, you put L$ in a day traders pocket who can then afford to undercut (and, in fact, has a financial *incentive*) to undercut the market.

A day trader does not want to wait, volume is money.

What are the implications of this? Well, LL is 'taxing' the lindex 3.5% everytime someone does a market sell (assuming you market sell to a day trader, which isn't a terrible assumption).

Rather than this 3.5% working in the economy it's going into LL's coffers. Whether or not this is a good thing, I'll let you debate.

Anna, Anna, Anna shame on you. Look at this confirmation:

Thank you for using SL Exchange, we appreciate your business! Order details follow.

Regards,

SL Exchange

Order details:
Summary: Partially Filled
Order ID: 94130
Action: Sell
Symbol: SLL
Filled: 30000.00SLL
Rate: 320
Price: $93.75USD


I sold L$30,000 at a rate of L$320.0/1 and received $93.75. If you will take out your calculator and divide 30,000 by 93.75 you will get 320.0. Had I tried to sell the same L$30,000 at a rate of L$320.0/1 on the Lindex that both you and Anshee Chung think I should have done. I would have received $93.75-$3.28 commision or $90.47 for an effective rate of $331.6/1. Now the Buyer on the Lindex would have only payed $94.05 for those L$30,000 while on the SLX the Buyer actually paid $95.54 for the same amount. I made much more on the SLX than I would have on the LindeX and that is what I'm trying to tell you people. Do I care if the buyer could have gotten a better deal on the LindeX, no and as a seller neither should you. The only thing you should care about is where to get the best deal. The people who place the limit buy orders on the LindeX are much smarter than I am and apparently much smarter than both you and Anshee Chung think they are.