LindeX "Market Sell" is a Rip Off

A couple of days ago I went to sell 50,000 L$ on LindeX. I saw a new option there that I hadn't used before, "Market Sell". This option is described as:

"Just tell us how many Linden Dollars you'd like to sell, and LindeX will automatically match you with buyers. "

The day that I was selling L$, the highest ratio to US$ was L317/$1. Not good, but that's what was there. So I figured, hey, the worst I do is L317/$1. Maybe I'll get a little better even. So I placed the order.

Imagine my surprise when I immediately received a cheerful note from Linden Lab announcing that they'd sold my L$ for L411/$1!!!!

That's right, a sale from which I should have generated at the very least $157.73 netted me a grand total of US$121.54, which was $36.19 less than I should have earned. This is a TWENTY THREE PERCENT loss on my sales income. And where did that extra $36.19 go? You guess.

I contacted Linden Lab about this. Received no answer. I asked them (insisted, really) to take back their $121.54 and return my L50,000 so I could sell it at an honest price. No answer. I told them I would give them the benefit of the doubt and assume the system was temporarily busted. No answer. I told them I would take this to the forums. No answer.

Linden Lab presented that they would sell my L$ to matching buyers... but then traded my L$ at L94 higher than the going market.

Linden Lab wants us to believe that they're working in our best interest. They want us to believe that they'll "never sell L$" in competition with their customers. But then we see something like this and any trust we might have had in their company goes down the drain. What is there for us to respect and trust in such policies?

Unfortunately your inexperience cost you $36.19. I'm sorry to hear that but the fact of the matter is your market sell order wasn't matched to the limit sell offers, how could it you were both selling, It was matched to limit buy offers and you must have been one of the first to execute a market sell because had you waited the limit buy offers dropped to about L$330/1. Not as good as L$317/1 but you would have executed you order immediately. That is the purpose of market orders immediate execution at the best available rate. The rate you got wasn't the best available rate for even a hour after market buy orders were instituted. Should you want to do that again look at the chart in red below you market order box for the best available rate and amount offered to buy at that rate.

Svar, I'm sorry... I'm no dunce but I don't understand a word you said here.

The bottom line is that at the time I placed this order, the very worst sell rate was L317/$1. So that is the worst I should have done. To state that the L$ dropped to L330 the moment I placed the order is just a little hard to swallow, eh?

you are misunderstanding something Wayfinder;

best sell rate is at 317/usd.
best buy rate is at 335/usd.

if you chose "match with best buy rate" while selling your L$ it will match your L$ with 335/usd instantly.
Same for buyers,
if a buyer chose "match with best sell rate" while buying, he will buy instantly at 317/usd.

Your other option while selling is to set a price.
If you want to sell at 317/usd, you should set it.
I hope you understood now.

I don't have much to add, but I'll explain it a little more simply. When you use the sell now option, you're trading money for time. With sell at a set rate, it's exactly the opposite. In fact, the wait could be infinate depending on the price you've picked.

Well, I appreciate the explanation... but it's a messed up system. No one in his right mind would sell at 330 when the worst on the market is 317. This is extremely poor conceptualization. I have used other "instant sell" systems before... and all they do is price your sell at one unit lower than worst case scenario. The way the LindeX Market Sell is set up is insane. Their documentation is not sufficient. I doubt that anyone would knowingly take a 23% loss in sales just to sell now. I could have listed at 318 and sold now just as easily. The whole concept is ludicrous.

I don't mean to be anti-Linden Lab, but this stuff gets old after a while. It's like they're so busy being geniuses that they don't stop and think about what they're doing-- or whether it's going to wind up ticking off their clients.

You don't understand the currency market as it now operates. Market buy orders are matched to limit sell orders to execute a trade and this is what has been happening on the LindeX since it opened. On 22 May at 1:26 PM SL time Jeff Linden announced that the LindeX had just instituted limit buy orders with the corresponding market sell orders. In the case of a market sell order when it is executed it is matched to limit buy orders to give the market sell offeror the best available rate from the existing limit buy offers.

You were premature in placing your market order because there were probably only 5 limit buy offers on the table at the time. LL should have delayed executing any market sell orders for an hour or two after accepting limit buy orders but the active currency traders were eager to get started and one of them bragged "I am bought some L$ at 397/usd".

Well that's what buyers (who right now are mostly trading L$) can offer you for immediate liquidity. Because it's mostly traders offering to buy in large quantities, the spread between the best buying price and the best selling price is probably almost always going to be large enough to reflect the transaction costs, which right now are very very high. The spread is about as tight as it can be right now actually.

Well I assure you it's the last time I will do so. Linden Lab should not allow such a system to exist... or if it does, they should make sure their clients know exactly how it works before putting it as the first option on their sell page.

A guy today suggested starting a total boycott against LindeX. At first I was against that... but now I'm not so sure but that he has the right idea.

It's amazing how Linden Lab can take the simple concept of selling L$ for US$ and totally twist it up.

I think I do. It would appear to have been changed to satisfy those individuals who want to play at being currency traders rather than residents exchanging the Lindens earned through their creativity for US$... Please correct me if I'm wrong though, I'm reasonably well educated but frankly it seems like gobbledygook to me.

Why should Linden Lab not allow a normal and sane financial market to exist? Anyone can make an offer to buy or sell at a price they specify, and anyone can choose to accept the best price offered and buy or sell right now. This is how markets work.

Your idea of sane and my idea are two different things.

What I think you're failing to understand is that LL sold my L$ at a price I would not have agreed to had I known what they were going to do. They did so without explaining to me what they were going to do. They did so making it seem like I would get a fair exchange for my work. That's not what happned.

I think CJ above said it very well:

It would appear to have been changed to satisfy those individuals who want to play at being currency traders rather than residents exchanging the Lindens earned through their creativity for US$... Please correct me if I'm wrong though, I'm reasonably well educated but frankly it seems like gobbledygook to me.

I may have come across as a little confrontational in my post, so to put it another way: No he doesn't understand the way the market works now, and why should he be expected to ? Therein lies the problem.

The real world market analogy isn't entirely appropriate, we don't exchange our real life earings on a daily basis for another currency. The Lindex serves to allow people who provide content in game to exchange their earnings for real world currency. Very few are involved in or have any interest in, the world of financial trading so the fact that the market makes little sense to them now IS an inherent problem as it is failing in its primary purpose.

I'm not of the 'it's a game' camp anymore than I am of the 'it's a serious business platform'. SL is just what it is, and it succeeds or fails on that basis not on whether it always functions successfully as a game, or follows exactly the processes of real life.

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I hear comments like this a lot since the change was made.

If the average player (ie the majority) cannot seem to figure out quite how it's supposed to work, and we lose out... then the market is free to be manipulated by the tiny minority who play such games regularly to make a profit, and the rest of us lose out.

It's quite clear to anyone that this is a bad system for the majority, even if only down to the fact we don't understand it and haven't had sufficient information to be able to.

Bring in fixed rates, and remind people that any outside third party transactions are not secure in any way. I'd rather lose a dollar or so by getting a slightly less official rate, than lose everything by being conned on a third party exchange.

Lewis

Ok, I'll correct you, since you're wrong. It was changed for very solid and valid reasons, and it is a good change that will benefit the economy as a whole. I don't know if anyone will provide a detailed explination of a topic which has been discussed time and time again, but please try a forum search.

I thought you never cashed out L$? Who is "we" and "the rest of us"?

Thankyou for your insightful and thought provoking answer.

In response I'll reply in the same way I would to the minority who like to bring their gun games out of the combat sims & into the grid at large under the misapprehension that their particular game is somehow relevant to everyone elses existance: Now run along and play in the appropriate environment. I have no personal disagreement with the way you want to participate in secondlife but not if it's to the detriment of the majority of residents.

It is very, VERY important that buy orders be present to provide support for L$ prices. Have you not NOTICED the rate of depreciation lately?!

edit: Anyone who wants to buy some of this excess L$ being offered for sale for ANY reason has my 100% support and gratitude. It is SO CRITICAL that we find more buying power to match the selling demand!

In your world/game/participatory experience of SL.

I'm a real life architect. Howabout I tell you it is VERY important that in future all your builds shall be demonstrated to satisfy the criterior of structural integrity, thermal efficiency, building regulations and planning laws ?

Furthermore I shall patronisingly point this out over and over again, and even try, patiently, to explain to you why it's so important you do things my way even though you have no interest in knowing or any reason why you should ever know ?

If you read my follow up post, I tried to point out why I felt the new system is flawed, whether or not you now feel it matches more closely your need for it to fit a real world analogy, however you chose not to reply to it.

I don't make a habit of it, no... but I needed to hold L$25,000 so I could buy a new piece of land before it went, whilst waiting for the person who was willing to buy my old land to log on and pay me - plus, of course, I wanted a little time to move what I had from where I was to where I was going (it was only 50m down the road but a bigger plot).

So, having bought L$25,000 .... it was then surplus, which I then sold off over a few weeks in small amounts to bring my balance back down to where it needed to be for my style of gameplay.

I didn't even "cash out" either ... it just stayed on my US$ balance until tierday.

Lewis

First of all, it is me who bought some L$ at 397/usd.
I needed L$ to buy an island from a resident for over 320000L$. And i placed a buy request. And one sold for 397/usd.This was only 3700L$. So what is wrong with this? With the old Lindex buyers had no chance to set a price. They had to buy what they see. Now they have a chance to set a price. So yes i set yesterday, and bought some at 397/usd, but i bought rest at 317/usd. Because i couldnt buy fast enough, then i decided to give 317/usd.
What is wrong with this? I, as a buyer, had a chance to set price for my buy request. Anyone who reads the market instructions could easily understand how it is working. The problem is, while you are trying to sell at the new lindex, you havent read anything, but just placed.
But again repeating: i bought L$ to buy an island, not to resell. Can easily prove this.

Oh get a grip. The Lindens are trying to help the community, and I support that effort, perticularly after watching the recent L$ crash. If you don't like LindeX, go set up a fixed price exchange. I'm sure you'll attract a lot of business and build up a big bank of L$ if you choose the right price to fix. If you just want it back the way it was, set up a currency classified ad with no bottom in sight or clearly defined.

Wayfinder is out some $30. Neither he nor I understand the market anymore.



So you could just be an architect, rocket scientist or even a texture artist just by reading the instructions could you ? It's not that simple. Just because you are well versed in financial trading already doesn't mean others will ever be. The LindeX served a purpose before, it has been demonstrated by a typical resident to no longer be serving that purpose so well.

I am using lindex 2 or 3 times in a month. But yes you are right if even one couldnt understand something, it means it is not understandable.
So ok, modify it.
But my point was that my L$ buy request is to buy L$ for an island. not to
buy - resell at higher rates. I have better things to spend my time.

I'd just like to add, the only "spread" I understand is what I put on my toast sometimes.

Seriously.