4 ms·

Haha, in the heyday of Runescape it used to be possible to simply have buy and sell orders sitting in the GE for the same rare items simultaneously, and over ti

by nojs 2y ago

Haha, in the heyday of Runescape it used to be possible to simply have buy and sell orders sitting in the GE for the same rare items simultaneously, and over time they’d both get filled for a profit. I guess you would call it “market making”.

bboygravity 2y ago
This is actually kind of how the US market works with essentially 1 market maker who is by far the largest and who also happens to be the largest political donor (100 million a year to gop alone). Oh, and like Bernie Madoff, the owner of that market maker also owns a hedge fund (which like Bernie's makes completely impossible profits year after year). The hedge fund is of course a totally seperately run business from the market maker /s /s /s So that actually sounds quite realistic to me from the market maker point of view of how things actually work in the US.
- postexitus 2y ago
  This is actually how markets are made - do you think a second hand book shop operates any differently?
  - bboygravity 2y ago
    Second hand book stores take people's money and then give them nothing in return? I'm referring to naked shorting and failing to deliver perpetually. Sorry, I fail to see the analogy.
    - postexitus 2y ago
      Analogy was between market making (buying and selling the item in Runescape with a spread) and second hand book sellers (having a buy/sell price that's not equal to each other for a second hand book). Citadel Securities does not do naked shorting and does not fail to deliver - they make markets by taking position both on long and short side of the market with a spread in between. Some of the short positions they take may not have an immediate backing - but they make up for that by offering more more and attractive prices for bids making up the shortfall within a matter of milliseconds.
- next_xibalba 2y ago
  You appear to be referencing Jeff Yass and Susquehanna International Group. Why are you being cagey about saying so? Their hedge fund has had losing years, whereas, as far as I recall, Madoff never reported a loss. On what information are you basing your claims?
  - mmiyer 2y ago
    They're referring to Ken Griffin / Citadel (Securities). Not that it makes their claims any less silly in terms of fundamentally misunderstanding how markets work.
    - bboygravity 2y ago
      What claim about how the market works is silly exactly and why? My claim was that 1 person owns the 1 major US market making business AND a hedge fund. Facts: they can control the price (naked shorting + strategic FTDs) and trade on it. Even if they can't/don't control the price, they can still front run the entire market. And even if they don't do that bEcaUsE iT's iLliGaL they legally (not ethically) do it through PFOF from Robin Hood among others. They do all of that and way more. Just look up the continuous massive FINRA and SEC violations and the (tiny) fines they pay for it. But I'm sure all is fine and dandy. I find it mind blowing why anybody would defend the biggest crook since Madoff.
      - mmiyer 2y ago
        You should be happy that market makers like Citadel Securities exist. Payment for order flow is why commission free trading can exist. Citadel Securities, Virtu, Hudson River Trading, Jump Trading etc compete in a negative sum game which reduces the bid ask spread on various assets (i.e. make them cheaper to trade for everyone). Also lol that a hedge fund with about 1% of total hedge fund assets controls prices. What do you think the other hedge funds and trading firms are doing?
        immibis 2y ago
        Presumably (s/he thinks) the other hedge funds are not also market makers.
sharperguy 2y ago
I used to wake up before school, dump my entire stack of gold on the GE for bones (just the regular ones) at a few gp below average price. By the end of the day the order would usually be fulfilled. Then I'd dump them back on the market at a few gp above average price and it would be fulfilled by the morning. Most days it would net me a small profit, ocasionally prices would fall slightly throughout the day and I'd lose a little, but equally some days it would rise and I'd make extra.
- andrepd 2y ago
  You needed an FPGA to pull your orders on underlying price moves /s
- Spivak 2y ago
  How could you lose money on a standing sell order for a higher price than what you bought it for?
  - sidewndr46 2y ago
    lots of video games charge a fee of in game currency for a transaction through an auction house or other system. It acts like a sink against inflation in the video game economy
    - immibis 2y ago
      RuneScape did not, and did have massive inflation, to the point that some players would have trouble keeping their wealth in gold coins due to hitting the signed integer limit.
  - sdwr 2y ago
    If the market moves down after you bought, you are stuck holding the bag. You can either a) sell for a loss, or b) keep your item, and be unable to make further trades until the price (maybe?) recovers. Remember that OP put his entire stack into this, so he can't run the spread while his item isn't selling.
  - 2y ago
mhh__ 2y ago
This is indeed how market making works.

by nojs 2y ago

bboygravity 2y ago

This is actually kind of how the US market works with essentially 1 market maker who is by far the largest and who also happens to be the largest political donor (100 million a year to gop alone). Oh, and like Bernie Madoff, the owner of that market maker also owns a hedge fund (which like Bernie's makes completely impossible profits year after year). The hedge fund is of course a totally seperately run business from the market maker /s /s /s So that actually sounds quite realistic to me from the market maker point of view of how things actually work in the US.

postexitus 2y ago
This is actually how markets are made - do you think a second hand book shop operates any differently?
- bboygravity 2y ago
  Second hand book stores take people's money and then give them nothing in return? I'm referring to naked shorting and failing to deliver perpetually. Sorry, I fail to see the analogy.
  - postexitus 2y ago
    Analogy was between market making (buying and selling the item in Runescape with a spread) and second hand book sellers (having a buy/sell price that's not equal to each other for a second hand book). Citadel Securities does not do naked shorting and does not fail to deliver - they make markets by taking position both on long and short side of the market with a spread in between. Some of the short positions they take may not have an immediate backing - but they make up for that by offering more more and attractive prices for bids making up the shortfall within a matter of milliseconds.
next_xibalba 2y ago
You appear to be referencing Jeff Yass and Susquehanna International Group. Why are you being cagey about saying so? Their hedge fund has had losing years, whereas, as far as I recall, Madoff never reported a loss. On what information are you basing your claims?
- mmiyer 2y ago
  They're referring to Ken Griffin / Citadel (Securities). Not that it makes their claims any less silly in terms of fundamentally misunderstanding how markets work.
  - bboygravity 2y ago
    What claim about how the market works is silly exactly and why? My claim was that 1 person owns the 1 major US market making business AND a hedge fund. Facts: they can control the price (naked shorting + strategic FTDs) and trade on it. Even if they can't/don't control the price, they can still front run the entire market. And even if they don't do that bEcaUsE iT's iLliGaL they legally (not ethically) do it through PFOF from Robin Hood among others. They do all of that and way more. Just look up the continuous massive FINRA and SEC violations and the (tiny) fines they pay for it. But I'm sure all is fine and dandy. I find it mind blowing why anybody would defend the biggest crook since Madoff.
    - mmiyer 2y ago
      You should be happy that market makers like Citadel Securities exist. Payment for order flow is why commission free trading can exist. Citadel Securities, Virtu, Hudson River Trading, Jump Trading etc compete in a negative sum game which reduces the bid ask spread on various assets (i.e. make them cheaper to trade for everyone). Also lol that a hedge fund with about 1% of total hedge fund assets controls prices. What do you think the other hedge funds and trading firms are doing?
      - immibis 2y ago
        Presumably (s/he thinks) the other hedge funds are not also market makers.

sharperguy 2y ago

I used to wake up before school, dump my entire stack of gold on the GE for bones (just the regular ones) at a few gp below average price. By the end of the day the order would usually be fulfilled. Then I'd dump them back on the market at a few gp above average price and it would be fulfilled by the morning. Most days it would net me a small profit, ocasionally prices would fall slightly throughout the day and I'd lose a little, but equally some days it would rise and I'd make extra.

andrepd 2y ago
You needed an FPGA to pull your orders on underlying price moves /s
Spivak 2y ago
How could you lose money on a standing sell order for a higher price than what you bought it for?
- sidewndr46 2y ago
  lots of video games charge a fee of in game currency for a transaction through an auction house or other system. It acts like a sink against inflation in the video game economy
  - immibis 2y ago
    RuneScape did not, and did have massive inflation, to the point that some players would have trouble keeping their wealth in gold coins due to hitting the signed integer limit.
- sdwr 2y ago
  If the market moves down after you bought, you are stuck holding the bag. You can either a) sell for a loss, or b) keep your item, and be unable to make further trades until the price (maybe?) recovers. Remember that OP put his entire stack into this, so he can't run the spread while his item isn't selling.
- 2y ago

mhh__ 2y ago

This is indeed how market making works.