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Seems like HFT in the real world. What did hft defenders always say? That they are just liquidity providers, right? But no one says there is a need for this ext

Seems like HFT in the real world. What did hft defenders always say? That they are just liquidity providers, right? But no one says there is a need for this extra liquidity. I wonder whether regulators will ever target this.

ChadNauseam 4y ago
This is just arbitrage, and has very little to do with HFT. In a normal market, scalpers don’t exist because when products are flying off the shelves you either raise your prices or increase your production. Game console companies are for some reason unwilling to sell their consoles at auction (which would eliminate scalpers) or increase production so an arbitrage opportunity is born
seabird 4y ago
Consumers are seeing a need for the scalpers; their service is valued at $200-$300. Whether or not 20 people botted a single one for their own personal use, or one person botted 20 to scalp, you don't have one in the end. Pay $200ish over MSRP and all the headache of locating and securing one goes away. It would be nice if supply kept up, but it's clear at this point that it's not going to.
- teakettle42 4y ago
  > their service is valued at $200-$300 What service? > Pay $200ish over MSRP and all the headache of locating and securing one goes away. They create the headache in the first place. Do you also think a protection racket provides a service? If you pay them for protection, all the headache of your business being firebombed goes away!
  - michaelt 4y ago
    > What service? Imagine if, to get the latest gadget you had to queue outside a store for 30 hours - but you could hire someone to queue for you. Theoretically one could argue the scalpers are queuing so you don’t have to.
  - recursive 4y ago
    The service is making them available. You have to pay a premium for this service. If it wasn't for scalpers, then you (probably) just wouldn't get one, unless you're waiting in line for the store to open.
    - deleted 4y ago
      [deleted]
    - teakettle42 4y ago
      Using bots to monopolize the supply and maximize their own profits is rent-seeking by an economic leech, not a service.
      - recursive 4y ago
        Supposedly, all rational agents in a capitalist system try to maximize their own profits. If consoles were priced correctly, they wouldn't be able to make any profit by doing this. They'd just have a warehouse full of new consoles and not enough buyers. The fact that it's even profitable means they'll continue to do it. I think there are really only two possible solutions to this from the supplier side. 1. Increase production. 2. Increase MSRP. Trying to regulate away this problem will just lead to more "innovative" scalpers.
        deleted 4y ago
        [deleted]
        sorry_outta_gas 4y ago
        If if the ps5 went to $650 or $700 without tax it would entirely kill sony's gaming business if anything microsoft's plan of offering two sku's lowering the price has been more effective
        recursive 4y ago
        > If if the ps5 went to $650 or $700 without tax it would entirely kill sony's gaming business How's that? If that's what people are already actually buying them for, then people can already afford them.
  - dragontamer 4y ago
    Apple fixes the problem by just raising MSRP by $200, automating the scalping and allowing Apple to capture all of that price difference.
    - bombcar 4y ago
      Apple also makes sure to have various models at various price points. Nobody will spend $1200 for a $900 iPhone if there’s a $1200 version that has more space is in stock.
  - anonymousab 4y ago
    > They create the headache in the first place Only if the console wouldn't completely sell out every time without the scalper. But it would. So the scalper provides a service to consumers with more money by allowing them to avoid the hassle of competing with lower classes for popular goods.
  - colinmhayes 4y ago
    > They create the headache in the first place. I don't think this is true. The fact that scalpers are still buying consoles means they're still selling them. That means if the scalpers didn't exist consoles would still be sold out, it would just be individuals following twitter accounts to spam refresh for a single console instead of 10.
  - seabird 4y ago
    >What service? Keeping you from having to constantly try and ram through the checkout on a moments notice and still not get the product in the vast majority of attempts. >They create the headache in the first place. They would be completely sold out even without the scalpers. The scalpers are selling them to somebody -- that somebody would have just bought at MSRP and you would still have to do what I mentioned above. >Do you also think a protection racket provides a service? If you pay them for protection, all the headache of your business being firebombed goes away! This is a pretty ridiculous characterization, even if you don't like what scalpers do. You are not being forced to buy a PS5. You're not even being forced to buy a PS5 from them. You can pull up a restock stream and watch it like a hawk if you have the time. They're not engaging in violence against you because you didn't buy a PS5 from them.
    - teakettle42 4y ago
      Scalpers abuse the social contract — and abuse access to retailer storefronts — to force themselves in-between the vendor and their customers. They’re rent-seeking leeches that exacerbate supply issues. They’re not providing a service; they’re interfering with our ability to engage in free exchange with retailers and manufacturers, and doing so through deceptive, dishonest, and immoral practices.
      - sio8ohPi 4y ago
        "They're interfering with our... free exchange with retailers", you say, while literally complaining about someone else's free exchange with retailers.
        teakettle42 4y ago
        The retailers in this context don’t want their business.
      - seabird 4y ago
        They're not forcing you to do anything at all. It's not even close, and I can float a guess that you haven't actually tried to buy a PS5 or any item like it at MSRP because you wouldn't seriously believe what you're saying if you did. I guarantee you that if you have time to burn and subscribe to one of the myriad sources of restock updates, you can get a PS5 at MSRP. I know multiple people who have done it. Just because it's possible doesn't mean that it isn't a pain in the ass. It's so annoying, people pay $200 to not have to do it. If the scalpers didn't exist, it would still be just as much of a pain in the ass, because the scalpers definitionally need somebody to buy everything that they do. The demand isn't erased just because they don't exist. You're going on about how scalpers are abusive, deceptive, dishonest, immoral, rent-seeking leeches and are refusing to engage with the reality that their existence doesn't change anything other than giving you the option to pay $200 and skip the bullshit. I'm not asking you to like them, I'm just telling you that not much would be different if they were gone.
lordnacho 4y ago
But financial liquidity can be made out of thin air. Real world products can't.
q-big 4y ago
> But no one says there is a need for this extra liquidity. The fact that scalpers can sell the consoles for a much higher price shows that there is no market equilibrium with respect to the prices that the console vendors set. To achieve this, console producers could choose two strategies: a) increase production b) increase prices a is impossible because of chip shortages, so b would be the way to choose to achieve "supply = demand" (i.e. everybody who is willing to pay the market price will get a console). Since console producers are not willing to do this move (perhaps for "marketing reasons" à la "our console is this cheap"), scalpers will make use of this market inefficiency, and ensure that the prices are those where there is a market equilibrium. So, scalpers change the situation from "there is more demand than supply" to "supply = demand", making the market balanced. Thus, the existence of scalpers is rather are sign that the console producers chose a price that is too low. The existence of scalpers is thus a mere symptom of the bad pricing decision of the console producers.
- babypuncher 4y ago
  There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO and gives you a number that can actually be used to measure the "value" provided by premium scalper prices.
  - q-big 4y ago
    > There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. I don't see how this solves the problem: what prevents the people who want their iGadget faster paying a larger price to a scalper? > But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO As far as I am aware, there do exist (even quite some) vendors who offer the option of paying immediately and sending you the new XBox or PlayStation as soon as they get their delivery. This is a queuing system.
    - 4y ago

ChadNauseam 4y ago

This is just arbitrage, and has very little to do with HFT. In a normal market, scalpers don’t exist because when products are flying off the shelves you either raise your prices or increase your production. Game console companies are for some reason unwilling to sell their consoles at auction (which would eliminate scalpers) or increase production so an arbitrage opportunity is born

seabird 4y ago

Consumers are seeing a need for the scalpers; their service is valued at $200-$300. Whether or not 20 people botted a single one for their own personal use, or one person botted 20 to scalp, you don't have one in the end. Pay $200ish over MSRP and all the headache of locating and securing one goes away. It would be nice if supply kept up, but it's clear at this point that it's not going to.

teakettle42 4y ago
> their service is valued at $200-$300 What service? > Pay $200ish over MSRP and all the headache of locating and securing one goes away. They create the headache in the first place. Do you also think a protection racket provides a service? If you pay them for protection, all the headache of your business being firebombed goes away!
- michaelt 4y ago
  > What service? Imagine if, to get the latest gadget you had to queue outside a store for 30 hours - but you could hire someone to queue for you. Theoretically one could argue the scalpers are queuing so you don’t have to.
- recursive 4y ago
  The service is making them available. You have to pay a premium for this service. If it wasn't for scalpers, then you (probably) just wouldn't get one, unless you're waiting in line for the store to open.
  - deleted 4y ago
    [deleted]
  - teakettle42 4y ago
    Using bots to monopolize the supply and maximize their own profits is rent-seeking by an economic leech, not a service.
    - recursive 4y ago
      Supposedly, all rational agents in a capitalist system try to maximize their own profits. If consoles were priced correctly, they wouldn't be able to make any profit by doing this. They'd just have a warehouse full of new consoles and not enough buyers. The fact that it's even profitable means they'll continue to do it. I think there are really only two possible solutions to this from the supplier side. 1. Increase production. 2. Increase MSRP. Trying to regulate away this problem will just lead to more "innovative" scalpers.
      - deleted 4y ago
        [deleted]
      - sorry_outta_gas 4y ago
        If if the ps5 went to $650 or $700 without tax it would entirely kill sony's gaming business if anything microsoft's plan of offering two sku's lowering the price has been more effective
        recursive 4y ago
        > If if the ps5 went to $650 or $700 without tax it would entirely kill sony's gaming business How's that? If that's what people are already actually buying them for, then people can already afford them.
- dragontamer 4y ago
  Apple fixes the problem by just raising MSRP by $200, automating the scalping and allowing Apple to capture all of that price difference.
  - bombcar 4y ago
    Apple also makes sure to have various models at various price points. Nobody will spend $1200 for a $900 iPhone if there’s a $1200 version that has more space is in stock.
- anonymousab 4y ago
  > They create the headache in the first place Only if the console wouldn't completely sell out every time without the scalper. But it would. So the scalper provides a service to consumers with more money by allowing them to avoid the hassle of competing with lower classes for popular goods.
- colinmhayes 4y ago
  > They create the headache in the first place. I don't think this is true. The fact that scalpers are still buying consoles means they're still selling them. That means if the scalpers didn't exist consoles would still be sold out, it would just be individuals following twitter accounts to spam refresh for a single console instead of 10.
- seabird 4y ago
  >What service? Keeping you from having to constantly try and ram through the checkout on a moments notice and still not get the product in the vast majority of attempts. >They create the headache in the first place. They would be completely sold out even without the scalpers. The scalpers are selling them to somebody -- that somebody would have just bought at MSRP and you would still have to do what I mentioned above. >Do you also think a protection racket provides a service? If you pay them for protection, all the headache of your business being firebombed goes away! This is a pretty ridiculous characterization, even if you don't like what scalpers do. You are not being forced to buy a PS5. You're not even being forced to buy a PS5 from them. You can pull up a restock stream and watch it like a hawk if you have the time. They're not engaging in violence against you because you didn't buy a PS5 from them.
  - teakettle42 4y ago
    Scalpers abuse the social contract — and abuse access to retailer storefronts — to force themselves in-between the vendor and their customers. They’re rent-seeking leeches that exacerbate supply issues. They’re not providing a service; they’re interfering with our ability to engage in free exchange with retailers and manufacturers, and doing so through deceptive, dishonest, and immoral practices.
    - sio8ohPi 4y ago
      "They're interfering with our... free exchange with retailers", you say, while literally complaining about someone else's free exchange with retailers.
      - teakettle42 4y ago
        The retailers in this context don’t want their business.
    - seabird 4y ago
      They're not forcing you to do anything at all. It's not even close, and I can float a guess that you haven't actually tried to buy a PS5 or any item like it at MSRP because you wouldn't seriously believe what you're saying if you did. I guarantee you that if you have time to burn and subscribe to one of the myriad sources of restock updates, you can get a PS5 at MSRP. I know multiple people who have done it. Just because it's possible doesn't mean that it isn't a pain in the ass. It's so annoying, people pay $200 to not have to do it. If the scalpers didn't exist, it would still be just as much of a pain in the ass, because the scalpers definitionally need somebody to buy everything that they do. The demand isn't erased just because they don't exist. You're going on about how scalpers are abusive, deceptive, dishonest, immoral, rent-seeking leeches and are refusing to engage with the reality that their existence doesn't change anything other than giving you the option to pay $200 and skip the bullshit. I'm not asking you to like them, I'm just telling you that not much would be different if they were gone.

lordnacho 4y ago

But financial liquidity can be made out of thin air. Real world products can't.

q-big 4y ago

> But no one says there is a need for this extra liquidity. The fact that scalpers can sell the consoles for a much higher price shows that there is no market equilibrium with respect to the prices that the console vendors set. To achieve this, console producers could choose two strategies: a) increase production b) increase prices a is impossible because of chip shortages, so b would be the way to choose to achieve "supply = demand" (i.e. everybody who is willing to pay the market price will get a console). Since console producers are not willing to do this move (perhaps for "marketing reasons" à la "our console is this cheap"), scalpers will make use of this market inefficiency, and ensure that the prices are those where there is a market equilibrium. So, scalpers change the situation from "there is more demand than supply" to "supply = demand", making the market balanced. Thus, the existence of scalpers is rather are sign that the console producers chose a price that is too low. The existence of scalpers is thus a mere symptom of the bad pricing decision of the console producers.

babypuncher 4y ago
There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO and gives you a number that can actually be used to measure the "value" provided by premium scalper prices.
- q-big 4y ago
  > There is a third option, a queuing system similar to what Apple does for their product launches. It would not eliminate scalping entirely. I don't see how this solves the problem: what prevents the people who want their iGadget faster paying a larger price to a scalper? > But being able to put your money down today and see that your new iShiny will be delivered in 6-8 weeks helps mitigate FOMO As far as I am aware, there do exist (even quite some) vendors who offer the option of paying immediately and sending you the new XBox or PlayStation as soon as they get their delivery. This is a queuing system.
  - 4y ago