This is a term that is so overused when talking about trading commodities to the point where it is almost cliche, but to be 100% it is a solid principal that should always be kept in mind. The problem is, when do you know when something is at the “low” or the “high”? Getting away with buying low and selling high-er (than you bought it) works in terms of making a profit. However, with everything, there will be a lowest point and highest point at which it is an optimal time to make a transaction.
Though these points are very hard to predict, outside the use of crystal balls and Ms. Cleo’s hotline [Thought it was Miss Cleo. -Riki, irrelevantly], there are techniques that you can use to make sure you get in low and sell at a good profit. If you are willing to put in the work, there are trades that can be made on a daily basis that will net you just a little bit more.
Most of the examples I will be talking about will be of the Magic Online variety. It is easiest to work the buy low, sell high on MTGO because you are given perfect information. Everything is laid out, so you know you’re going to make a profit before the transaction is even complete. These examples can be applied to real life cardboard Magic as well, but they are a little more difficult to execute since the turnaround for real life profit is much slower and not 100% guaranteed. “Max” from the forums asked that I use more real life examples and real life prices for my articles, so I will be doing so for each of these techniques. I am not doing this to brag or say, “Hey look at me and the money I made off trading” because it’s not that much on a small scale. I am just using a real life example so that people know 1) what to do and 2) it does happen and you can do it.
The Arbitrage – Arbitrage is a real finance term. What it means is basically, in real time, you are buying something and instantaneously selling it at a higher price. You take advantage of the difference in price until both your seller and/or the person buying change prices, moving towards equilibrium (or real market price). This is basically free money. Imagine you see someone on the street selling gum for $0.25 and someone standing right next to him buying gum for $0.50. All you have to do is buy it, then sell it right back. Sounds easy right? That’s because it is.
Even in a world of perfect information, arbitrages do exist. However, they are extremely hard to find. In the financial market, companies invest billions in supercomputers that search for arbitrages across worldwide markets. I doubt that anyone would invest in a supercomputer to search for these market price glitches on MTGO, but if you find one, it is an easy way to make free money.
Everything is listed in the Classifieds section, so all you need are eyes to find an arbitrage. It would probably not be worth it to try to actively search for these arbitrages, but if you stumble upon one, take advantage of it. The most common occurrence for the arbitrage is buying from a human seller and selling to a bot. Why? Since I’ve been playing on MTGO, I noticed something. Humans hate bots. Not everyone does, but most humans would rather sell/buy from another human than a bot. I personally feel that the bots are good, in that they establish set prices, not like human sellers who just sell stuff for whatever the hell they want. Most average prices for cards will be listed by bots because they can use fractions and hold credit. The outliers are posted mostly by humans because they are forced to round up. In some cases, the human chooses to round down. In more extreme cases, in which one is desperate for tickets, you can find a listing that is lower than what a bot would even buy it for. Now, I don’t know if that human would just rather not deal with a bot or if it’s because they just didn’t look. In the end, I don’t really care as I did the work and found the arbitrage.
Last night, I was searching for someone to buy my Figure of Destiny. It has dropped over 10 tickets since last week, and being the promo card for the MOCS Season 2 event this weekend I predict it would only drop further. In my search, I found a bot that would buy Figure for 21.5 tickets. This was only 0.50 below what I had it listed at in my ad and since no fish were biting, I decided to go with the bot. However, in my search, I found a person selling Figure of Destiny for 19 tickets. First, I sold my Figure to the bot, to make sure I got rid of it at the good price. Next, I messaged the seller and confirmed he was selling, not buying, Figure at 19. I picked that one up and sold it back to the bot. The bot lowered his buy price on the card, but I still made 1 free ticket on the trade.
Note that I sold my Figure before I invested in the second one. If I bought the Figure at 19 and it turned out the bot wasn’t buying at the higher price, I would be stuck with two cards I wanted to sell instead of just one. It happens sometimes that a bot may be down or may be out of tickets to give away because their prices are not updated. Make sure the bot is active and able to buy before you invest for an arbitrage.
I gave an example of this in one of my earlier Market Watch articles for this site. In case study number two, I cited the examples of what happened to key pieces of the Dragonstorm deck and the Elves deck after they won major events in real life. This may seem like a regurgitation of that subject, but I feel it is probably a better fit here and should be mentioned regardless, especially because it just happened with Swans.
The Sleeper is a little more on the side of speculation than fundamental market analysis. You would think that in a world of the Internet and perfect information, everyone would know about every deck and every card before anything ever happened with anything. However, if this were true, decks like Dragonstorm and Elves wouldn’t take entire fields by surprise, and everyone would have stocked up on those cards the moment they were released. The information is perfect, but humans, thank God, are not. Therefore, these things happen.
When a format is fresh, it is likely you will be able to execute the Sleeper. The thing to note about Elves is that it broke in the first major event for the Extended season. Similarly, GP Barcelona was the first major Standard event that included Alara Reborn. Though people had good knowledge of the format and decks that existed before the tournament, not everyone knew the new ones. Some sort of inside information helps (like if you talk to the friend of a Pro and find out what they’re going to be running), but most times you can get the hunch on a sleeper just by paying attention. Elves was rampant on MTGO and Workstation before Berlin. Articles were written about Swans and people were playing it in Daily Events online too.
Why it takes someone winning a major event for everyone to “wake up” about cards online, I don’t know. That is just the nature of our game, I guess. However, this is a very low risk, high reward technique that happens with a good degree of predictability. All you have to do is buy low before the big event and wait for the deck to do well. If it does, you’re in the money. If it doesn’t, you’ve only lost a few cents. Make sure you’re out before the hype cools down though.
The big buzz around the Swans started with Sam Black’s article. I don’t doubt that people were brewing up lists and ideas about this deck before the article, but this was a catalyst for the mainstream. I purchased a set of Swans online for 2.50 tickets each a week and a half before Barcelona. After testing with the deck a little, I realized how powerful it was. However, it didn’t really fit my style and I decided to move on for my testing. Generally, when I ditch a deck idea, I ditch the cards too. In this case, I felt it would be better to see what happened in Barcelona. Regardless of what I felt about the deck, the gamble was worth it. If Swans fell flat on its face, I would probably sell the cards back to a bot online for a loss of probably 0.50 each. However, if the deck did well, the card would surely skyrocket. So even though I was no longer playing with the deck, I would lose little by holding the cards for another weekend.
Late Saturday night (PST) the buzz surrounded the web on the “new” Swans deck. I probably should have tried to go in on a few more, but I wanted to be conservative and just experiment with my theory this time. By the time I woke up Sunday morning and found that Swans had taken the whole tournament, I knew I hit the mini-jackpot on my set of Swans. The bot price at 11am PST was 3.25. Of course, they were sold out. Bot buy prices (greedy guys) remained low, but human sellers were listing at 4 or 5 tickets each. I listed mine at 5.00 and waited for the fish. Incrementally and hourly, the price went up. By 3pm PST, the price was 5.00 for Swans of Bryn Argoll and I had just doubled up.
Currently, the Swans have leveled off at a 6.00 ticket sell/ 5.00 ticket buy. I could have waited on Sunday to see if the price went up more, but the key to the Sleeper is knowing when to get out. I was fine with a double up and didn’t want to get greedy and stuck like I did last time with Dragonstorm.
While you can try to find arbitrage for paper Magic, it is nigh impossible for you to find a real life store that is selling a card for less than it is taking it in for. However, if you know one store is taking a card in for more than another store is selling it, you definitely have an arbitrage there. And though the Sleeper is a technique you can definitely use in real life, the turnaround is slow and sometimes risky especially if a store already has a lot of the card. However, the Off Season Scout is a real life and online technique that I’ve used several times to pick up high-priced cards at discounted prices.
Because of the nature of Magic seasons, this doesn’t really work with Standard as much as it does with Extended. Standard can abuse the Sleeper and normal speculation more than most, but the Scout shines in Extended. This technique requires very little speculation or inside knowledge and is very effective. Ask yourself a few questions about Extended. What are some strong decks that lose very little, if anything, from the rotation? What decks did you see picking up steam towards the end of the season that would still be viable next season? What are some cards that you know for a fact will be popular regardless? Lastly, what are some cards that prey on these archetypes? Cards that have uses in multiple categories here would be good candidates for Off Season Scouting.
Cards like Tarmogoyf and Arcbound Ravager are going to be played in Extended regardless of the format. The beauty of it all is that when no one is playing Extended, everyone kind of forgets about these cards. This means that no one is searching them on eBay auctions and very few people are trying to buy them from the bots. So what do you do? Keep an eye out. Every once in a while, in your daily eBay search time (you know… that time you waste at work looking for random things on eBay), search for a Tarmogoyf. See a few for sale? Put them on your watch list. Ravager? Same. Think Ravager is going to be super popular this coming season? Put a watch for a few Kataki, War’s Wage. And now wait. If the auction goes for a steal of a price, then it’s all you. If it ends up going high because someone is thinking the exact same thing as you, then just wait for the next one.
Unlike Standard, which is just one long never-ending grind, Extended comes and goes like seasons. In the off season, prices drop. But sure as autumn comes after summer, prices of the hot cards will always spike come time for the season to start.
Last season, I decided to test this. I purchased two Arcbound Ravagers on MTGO a month or two before Extended season started, just to see what would happen. I figured Ravager was a safe bet because it didn’t lose anything from the rotation and would always be a popular archetype. I didn’t go in on a full set because Ravagers were already 10.50 each and I didn’t want to tie up my bankroll. As the season progressed, the sell price from the same bot went up a little. Then it went up a little more. Sure enough, before the end of the season, the price of Ravager was over 12 tickets. The deck was hardly even good, let alone format-dominating. The price was going up strictly based on the fact that it was in season and playable. I don’t know how it happened, but I stumbled upon a person who was buying Ravager for 18–I have no idea why–and I cleared out my pair for a decent profit. Regardless, I would have made money, simply for the fact that I went in early and sold at the peak.
I followed the prices of several other cards like Tarmogoyf and Engineered Explosives, both online and real life, and the same thing rang true. Prices spiked when they were in season and cooled once the season was done. This doesn’t mean you can find Goyfs and Ravagers for $5 a pop. But if you plan ahead you can purchase or trade for some of them while the value is low and sell at the peak. If you are planning on playing with them, the best time to pick them up would be around now. Even if you’re not playing with them, wait for a deal and hold them until the price peaks.
Overall there are lots of ways to make a little extra money with Magic besides just playing. Some people don’t like all the hassle and haggle of trading, so these devices should be right up your alley! Just always keep an open eye and open ear out to the market and you can grind out your next tournament entry or maybe even your next deck for free. Thanks for reading and hope to see you again next week!
Retiring Market Watch? – Riki and I got to chatting after I bombed out of the PTQ last weekend, and though I was semi-distracted (in the middle of a Cube Draft) our conversation got me to thinking. He asked me, “What card should I get you to sign? Eric has Tolarian Academy (in honor of his column). What is your signature card?” Riki mentioned High Market, which sounded cool. Someone else threw in Bazaar of Baghdad, which I would be more than honored to sign! Then he mentioned something about my column title and I don’t really remember what else, as I was trying to think about my game and about what card I would sign. I always loved Dark Confidant and Tarmogoyf, but those have little if not nothing to do with my articles. I’ve been running these articles under the title “Market Watch” for years, but I think it might be time for a change. So that being said, here is a list of possible titles I’ve found to replace “Market Watch”:
And one that doesn’t have a MTG card associated with it
Tricks of the Trade
Obviously lots of these cards are from Masques because that had a lot to do with the “market.” Let’s get some response in the forums to which title you guys think is best! Also, if you have an outside suggestion, feel free to post it. Thanks!