Item Price Stability

I leave for two weeks and you all accidentally the market. I was not able the participate in the Odyssey speculation, but I am enjoying catching up on it.

2013.05.16.19.26.13-12013.05.16.19.25.40-1

The wild swings that we are seeing in the Moon and Ice markets due to Odyssey adjustments made me reflect on the stability of the items that I trade.

I used my historical database to come up with a report to provide quantitative insight to help give values to the items that I instinctively know are high risk. Here is a snapshot of the lower and upper items listed in my Stability Report that covers three years of trading sorted by standard deviation (σ).

2013-05-15_price_detail

Here are some general observations about the items listed:

  • Basic minerals, ammo, and modules are the most stable.
  • Capital modules weigh in somewhere in the middle.
  • Tech2 ships fill the upper band of the report.
  • Tech3 hulls and associated Subsystems are randomly spread over the middle band.
  • Certain battleships are high on the report because their popularity has changed over time due to shifting fleet doctrines.
  • The Procurer BPO was an item that I speculated on heavily during the last patch, which netted very positive results.
  • Capital ships are subject to large swings due to mineral price changes.

A tenant of becoming a good trader is minimizing your risk while trying to maximize your rewards. My advice for new traders is to work with more stable items as shown in the shaded green area of my report; they are subject to less swing and therefore will help minimize risk. As your ISK resources grow, you can move into riskier items that will [hopefully] yield larger returns.

Update

Thanks for all the feedback in the comments. I actually spent some time recently to figure out how to calculate item volatility here http://k162space.com/2013/08/20/hac-price-volatility/. I’m working out how to pull numbers for all my data for a new post soon.


Inferno 1.2 Procurer BPO Speculation

Background

Along with the rebalancing the roles of the mining barges, their mineral requirements were also adjusted. The build requirements for the Tech 1 barges about doubled and therefore the BPO NPC price was adjusted to reflect the new value.

Here is my research on buying Procurer BPOs at pre-Inferno 1.2 prices to sell after the patch.

[Aug 9 update] It looks like CCP changed the NPC price in the Inferno 1.2.1 patch.

ORE Space

Since these BPOs are only seeded in the Outer Ring in two ORE stations, I was able to get a good view on how many were bought by using the market window.

Out of normal BPO purchases in ORE space amounted to 1,264 units starting in late July.

Patch Changes

CCP changed the values before going live. They had a different number published on the Test server and knowingly seeded a different value on the live server. *shakes fist*

Other Barges

I looked considered the increase in BPO price, the new role, market velocity, and added in a little bit of my own gut feeling. This showed that the Procurer BPO was the item with the most potential for profit.

ISK Injection

Given that these were purchased for 450 M and are now worth 0.508 B 0.838 B that means 73.3 B 491 B was created from nothing, or about 0.3% 2% of the normal 24 T ISK faucet amount stated in the 2012 Fanfest presentation. This amount doesn’t seem too noteworthy.

Speculating on Profits

In 76 days about 124 pre-Inferno 1.2 Procurer BPOs moved in Jita slightly above their NPC price of 450 M. If 1,264 out of normal units and around 561 move in Jita in the same time period, that means it will take about 1,118 days (3.06 years) for this stock to clear assuming that demand remains the same.

Twenty BPOs

I bought 20 Procurer BPOs at the old NPC price for a total investment of 9 B. Taking in account the new price of 0.508 B 0.838 B, we can value them at 10.16 B 16.8 B. This shows a 1.16 B 7.76 B increase in the NPC value of the items. I was expecting more profit, but that’s what you get when you speculate on patch day.

I have a few options on how to turn a profit with the BPOs:

  1. Sell them in Jita. I believe that due to the market saturation with pre-Inferno 1.2 prints, it will be a while before we start to see the new NPC cost in Jita of 0.508 B 0.838 B + a good margin. I could slowly sell the stock off as prices rise.
  2. Improve value by researching them and then sell.
  3. Produce BPCs for invention/manufacturing. As of this writing, there are not a lot of BPCs available on the open market.

I plan on doing all three to help spread the risk and start to get a return on this speculation adventure.


Inferno 1.2 Mining Barge Speculation

After reviewing the changes to Mining Barges and Exhumers on the test server that Lukas Box detailed, it was time to make a market move before the patch hit.

Speculation had driven up the price of barges to the new expected price after the 1.2 patch, but the BPO on Tranquility still had the original requirements.

We purchased 3x Procurer and 1x Retriever BPOs, found empty build slots a few jumps out from Jita, and began to build. Even selling directly to buy order gave us a good return on the simple Tech 1 construction. We moved 288x Procurer and 45x Retriever ships since the announcement of the barge changes and still have some stock left over made with the pre-Inferno 1.2 BPOs.


Percentage of Items from Invention vs Tech 2 BPOs

A while ago, CCP Diagoras posted some statistics on Twitter for the percentage of items that come from Invention vs Tech 2 BPOs to help quell the tinfoil hat theories that Tech 2 BPOs control the entire market. I recorded and sorted the tweets, but never released them.

What does this mean for you as an inventor looking at the market? Well, you will most likely want to stay away from the red items as the Tech 2 BPO owners have a stronger control on the price and can undercut you below your profitability threshold.

If you are interested in further Tech 2 BPO research that I have conducted, take a look at the T2 BPO Returns post.


I fail at fail pvping

This time around I planned to actually participate in hulkageddon. So, about a week and a half ago I made two fresh alts, joined them to my main corp and started their skillplans, going for thermodynamics, drone interfacing and the support skills. Then bought 70 thoraxes in jita and 70 thorax fits in Dodixie (thanks missioners!). Three hours before hulkageddon 3 starts, I realize that hulkageddon is going to start in three hours when I thought it was about eight hours away. Unfortunatley, I’m in the middle of garden chores for my grandmother.

One hour, four holly bushes and three car chases later I was at home. I booted up my two laptops, plan in mind. The theory was, I’d appear in system in an orca and two pods, warp to a station. Fit two thoraxes using the station system, put the fitted thoraxes in the maint bay. Warp to a safe, drop combat probes over the belts, pin a hulk, board and warp the thoraxes as fast as possible, land, gank, victory.

I’ve had…difficulties.

So, once I get home, I check evemon on the two characters I’ve been training. One has finished everything but drones V, and the other has finished everything except for Engineering V. Oh, and Gallente frigate IV.

Oops >.>

So, I get one of my nullsec alts, skilled entirely for a logistics BS droneboat. I start him training med hybrid turret, install a JC in the nullsec station I’m sitting in and pod myself back to empire. One hurtle over.

Then it comes to the orca. For those who just downloaded capsuleer or have short term memory loss, my Orca violently exploded completely due to my own idiocy and half-asleepness. For those not in my corp, we have a t1 replacement policy. For those who aren’t a close personal friend of mine, I’m half British. Thus when my CEO contracted me a new Orca for free, I felt horrendously guilty. Not enough to not use the Orca in stupid/risky scenarios, but still, guilty. Anywho, I found the orca on my main account and contracted it to my orca pilot who was currently working as a BS logistics pilot in null. Orca pilot installs JC in null station, pods herself, back to empire. Update clone, accept orca contract…..

Orca 40j away?

Double check clone is updated, change clone location to a different station, self destruct my pod again……

2j away. Much better.

Jita 15j away? eeh.

Hulkageddon starts in 45 minutes? DAMNIT!

I immidiatley buy whatever meta inertial stabalizers are avaliable in station, slap em on and light a fire under my 30-second align time hull. Half an hour later, I arrive in jita and start fitting the orca for cargo and combat probes.

Hmm, combat probes require an expanded launcher.

Hmm, orca pilot can’t use an expanded……damnit!

Three hour train time.

Buy cargo expanders, slap em on. Buy three large cargohold optimizations, fit rigs, yes I’m sure I want to do this…

“you need astronautics rigging at at least 1 to fit this.”

“What?”

OK, 40 minute train time but that’s not too bad, only two less thoraxes. Start it training.

Alright, since I had all the fits I purchased ahead of time already set, I stuff the 70x fittings of thoraxes in the orca and manage to fit right thoraxes. Here’s the fit:

Best Ion blaster I have at the time x5 (couldn’t find 400 meta 4 blasters for cheap for some reason. Go figure)

Best cheap target painter
Best cheap warp disruptor
tech one sensor booster with scan resolution

Four gyrostabs magnetic field stabs and a reaction control.

hammerhead I x5.

Oh wait, one of the alts has drones IV. Damnit!

And the other one can’t overheat. FFS!

Neither can use sensor boosters as that was a last minute change advised by Python Cartel. Who are jerks.

One of the alts can’t use a disruptor. How’d that happen?

Anyway, I start the alts training on whatever I’ve forgotten and manage to undock in the Orca with two thoraxes following her, one with a web fitted. Fast warping yay!

Alright, let’s go to an ice belt. On the way there, I find a hulk. In a belt.

Warp thoraxes to belt.

Keep range at 50m.

Launch drones.

Overheat. Engage target GOGOGO!

Are you sure you want to do this YES I AM SURE PLEASE LET ME NAO

FIRE FIRE FIRE Jammed, scrammed, I pop. Hulk is alive at 33% shields. How’d that happen?

Undaunted, I warp the pods out with the Orca to a safe and start fitting a thorax on one of the alt.

Concord: ” I HATEZ U PREPAR 2 DIE”

Me: “lolwut?”

alt: “GYAH EJECT EJECT EJECT” *pop*

So, apparently there’s this global criminal countdown thing.

In an Orca and two pods, I go to an ice system, .7 system. Go to a planet, check that big red 15 minute timer. Gone. Wewt!

Fit a thorax, tab to the other alt. Grab a thorax out of the Orca with the other alt and…

Concord:” Oh Em Gee WE SHOOT U”

me: “wut?”

alt: *pop*

Apparently getting killed by concord resets the criminal thingy. Alrighty. Wait 15 minutes, refit, warp to belt to a previously BMed hulk.

Wewt, no shield boosters or hardeners running. Engage!

An Arazu jams me.

Pop.

Pop.

Concord begins to warp scramble hammerhead I!

Pop pop pop pop pop pop pop pop pop.

Alright, let’s find a .5 system.

I find a .5 system, load up the combat probes, scan and BAM got a hulk. Fleetwarp the thoraxes, land on hulk, drones, lock, engage.

*PoP* *Pop*

I forgot to overheat >.<

Fifteen minutes later, two more thoraxes, lose two more thoraxes but get him to 2/3rds structure. Out of thoraxes, back to Jita. I'll try again tonight.


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