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Margin Trading Scam - A Guide

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#1 Posted: 2011.10.08 08:39  |  Edited by: Bloody Wench
I've been feeling a little guilty lately about the ease at which these go off. I thought I'd write a guide all about it then I can sleep soundly knowing that I've done my bit to help prevent them.

Margin trading - The skill. Allows you to place buy orders larger than you have Isk to cover. Down to 25% of the Order value.

Some setting up first, you need a place that has no Isk or somewhere you can throw Isk for safe keeping., an Alt, alt Corp wallet, empty wallet division, anything really.
Lets say I use my alt's Corp wallet which generally contains little or no Isk.

Find youself a target item. The best ones are very popular with high turnover but really no more than a days stock left in it.
You need a price point as well, do you buy the entire stock and relist it for some much higher number, or do you see a large gap in pricing where you can slot in at 20-50% more than you paid for your items? It's up to you, either way works.


Lets take my latest one for example, 5000 Units of Scorch M.

I'm looking through the markets and I spot that Scorch M has a decent seperation between 350K and 410K, about 1500 on the high end at 350 with some 3500 Units at or about 315K.

Count up how many units you're going to need to buy, to raise the Min Sell to 410000. In this case it was just over 5000 units.



Before you buy them up, set up your Margin Buy.
Remember the wallet you're using has no cash in it currently.

Place buy order, select advanced and make sure your empty corp wallet division is selected. Enter in 5000 with 5000 min quantity.

Set your buy price 80-100% above what you're going to list 5000 units at. Hit ok on your order and take note of how much Isk you're missing.
In my case this time, I listed items @ 412K and set my Buy @ 750K

Transfer from whatever source a little over the amount of Isk required to make the buy order and set it up again. 5000 with 5000 Min.

This order will never complete, it's impossible.
You don't have enough money in the wallet to buy the 5000 units, and the order can only be completed if they sell 5000 units all at once, but you can't afford all 5000, so the order just fails.
You lose your market fees, the remainder of Isk for the buy order is put back into your corp wallet division and the order dissapears.
You get a pop-up saying "You don't have enough isk"



Ok so go ahead and buy up your items now.
Relist said items at whatever you think is reasonable.
The crazier you are the longer it will take and the more chance you have of producers coming in and blowing it for you by dumping stock on the market at lower prices.

Don't list the whole lot in 1 big chunk, try to make it look less like a scam.

975 here, 1245 there, 300 here etc etc

This is to make it look attractive to people that don't know better.
They will see it and go "holy **** I can buy these 5000 units and sell them again straight away and nearly double my money!"

What really happens...

They buy up all your over-priced stock plus generally others stock as well, until they have thier 5000 units and they go to sell it to your margin buy.
Which fails...
So you've made your 20-50% (or however much, 500% isnt unheard of) you got your buy order money back, they bought the vast majority of your items and are stuck holding over-priced items.
You've made 20-50% for your effort, got some leftover items for resale at competative pricing, and they are holding several Billion worth of items that they will never get what they paid for it.


If it has a Min Qty in the Buy order...don't touch it.


Just to add, you don't sell any items at the hyper inflated price, you sell Zero items to the Margin Buy, the placer of the Margin buy only loses market fees.
Shepard Wong Ogeko wrote:   CCP should not only make local delayed in highsec, but they should also require one be undocked to use it. Then, even the local spammers have some skin in the game.
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#2 Posted: 2011.10.08 15:08
I'm stunned.

180 views and nobody has anything to say.

Big smile
Shepard Wong Ogeko wrote:   CCP should not only make local delayed in highsec, but they should also require one be undocked to use it. Then, even the local spammers have some skin in the game.
Support a High Resolution Texture Pack
#3 Posted: 2011.10.08 15:13
durrrr i dont get it. ****. i'll never get to play the market if im even too dumb to understand a scam if its laid out for me.

but good for you m8. i dont really see the evil in this scam, but then i dont understand it, so there.
.... You can't take the skies from me.
Brave Collective
#4 Posted: 2011.10.08 15:13  |  Edited by: CCP Zymurgist
Bloody Wench wrote:
I'm stunned.

180 views and nobody has anything to say.

Big smile



Who cares?
This isnt something new.

Trolling removed. Zymurgist
#5 Posted: 2011.10.08 15:17
You're right it's not new, and yet every time it takes less than a day for someone to fall for it.

So here it is laid out, let there be no more guilt about it.

Shepard Wong Ogeko wrote:   CCP should not only make local delayed in highsec, but they should also require one be undocked to use it. Then, even the local spammers have some skin in the game.
Support a High Resolution Texture Pack
Gallente Federation
#6 Posted: 2011.10.10 19:25
Most people are reading this, and kicking them self in the butt for falling for this. or they read it tried it, didn't set it up right and lost a ton of cash. BUT.... it is a great market scam, people fall for it daily. the average eve player doesn't know that you don't have to compete a buy order you set up. normally i would be mad if someone gave away a good scam, but too many people don't read the market area and will still fall for it. i guess i should say good job helping out the common man and if they read this and don't get scammed that's good for them. when people do get scammed it just makes it funnier because there's a post about it.
#7 Posted: 2011.10.11 04:24
I think the owner of a very large stockpile of Scorch M just had me War Declared.

Silent tears...
Shepard Wong Ogeko wrote:   CCP should not only make local delayed in highsec, but they should also require one be undocked to use it. Then, even the local spammers have some skin in the game.
Support a High Resolution Texture Pack
#8 Posted: 2011.10.11 06:42
Us 'normal' non market scammers can also profit from this. The scam (which occasionally has a contract with the over priced items in it) relies on the mark checking the market prices; i usually view the contract/overpriced market sell order (there will be no other items in region, but where i'm based that is only 2 jumps) then list my own overpriced sell orders a couple of million isk cheaper (but still at a massive potential profit).
The sucker does a show info on the "capital magnetometric gopher" (or w/e) when the contract/item is spammed in local, sees a large priced sell order (mine) and an even bigger buy order (scam). When they realise that i'm offereing an even better deal than the scammer, they buy my items instead; the best bit is i don't even need to have an alt with margin trading trained, i let the scammers do all the hard work for me!

tl;dr I see scam. I go 2 jumps to different region. I buy 10 units of {insert items here} for a few mil. I relist those back in my home region at less than the scammers sell order. My {insert items here} get sold for a huge profit, and when the mark tries to dump them on the scam buy order, it folds (so the scammer loses too).
#9 Posted: 2011.10.11 14:03
This is brillant even though its nothing new. I think the exspansion of this game is unreal and outright amazing as to the imagination of people. Whats sad is that there are scams like this in the real world...just laid out in this forum for EVE. Awesome to me! Big smile
#10 Posted: 2011.10.11 15:23  |  Edited by: Tyrnaeg en Varche
So, say normal price for item A is 10k isk. I buy all available items that are being sold below 20k isk. Then I set several SELL orders at about 25-30k isk, and a huge BUY order at 40k.

What stops a player that already has a large stock of item A (bought at normal price, 10k), to set a SELL order at 15k isk? This would fulfill my BUY order, even with Margin Trading applied.

So, he ruins my scam, i end up with DOUBLE the qty of item A -- and gets nice profit too (in this example 5k isk / piece).

Also, if by setting his sell order he sees that the huge BUY order is not fulfilled, he modifies the price until its total value gets below the escrow i've given with Margin Trade. (At level 5, 24% of normal escrow is given for the BUY order)

EDIT :: I just saw that OP says to set BUY order at 80-100% above SELL orders, which takes order of what i've written above. But, I leave this here as a way to counter the scam under certain circumstances.
Amarr Empire
#11 Posted: 2011.10.12 14:10
Tyrnaeg en Varche wrote:
So, say normal price for item A is 10k isk. I buy all available items that are being sold below 20k isk. Then I set several SELL orders at about 25-30k isk, and a huge BUY order at 40k.

What stops a player that already has a large stock of item A (bought at normal price, 10k), to set a SELL order at 15k isk? This would fulfill my BUY order, even with Margin Trading applied.

So, he ruins my scam, i end up with DOUBLE the qty of item A -- and gets nice profit too (in this example 5k isk / piece).

Also, if by setting his sell order he sees that the huge BUY order is not fulfilled, he modifies the price until its total value gets below the escrow i've given with Margin Trade. (At level 5, 24% of normal escrow is given for the BUY order)

EDIT :: I just saw that OP says to set BUY order at 80-100% above SELL orders, which takes order of what i've written above. But, I leave this here as a way to counter the scam under certain circumstances.


You obviously didn't read the OP properly, let me clarify for you:

The BUY order (the inflated one) is created at say 100m isk total and a MINIMUM of 1000 items. The WALLET the buy order is for only has 50m in it because of the margin trading skill.

If someone was to attempt to sell 1000 items to that buy order it FAILS because there's only 50m in the wallet and 100mil is needed to pay the seller.

If someone tried to sell 10 items to that buy order it FAILS because theres a minimum sell quantity of 1000.

The whole point of this scam is that you CANT counter/ruin it, it's simply not possible because there is always at least 1 condition (namely that the wallet the buy order uses never has enough isk in it) that cannot be met.

Whoever originally found this was a clever puppy! Big smile
#12 Posted: 2011.10.12 14:16
Ms Freak wrote:
The whole point of this scam is that you CANT counter/ruin it
…well, apart from not buying from the inflated sell order, which is where the scammer makes his money.

But then again, “not falling for it” might not really count as “counter/ruin it”. P
“If you're not willing to fight for what you have in ≡v≡ you don't deserve it, and you will lose it.”

Get a good start: Newbie skill plan 2.1.
#13 Posted: 2011.10.12 15:48
Ms Freak wrote:
You obviously didn't read the OP properly, let me clarify for you:

The BUY order (the inflated one) is created at say 100m isk total and a MINIMUM of 1000 items. The WALLET the buy order is for only has 50m in it because of the margin trading skill.

If someone was to attempt to sell 1000 items to that buy order it FAILS because there's only 50m in the wallet and 100mil is needed to pay the seller.

If someone tried to sell 10 items to that buy order it FAILS because theres a minimum sell quantity of 1000.

The whole point of this scam is that you CANT counter/ruin it, it's simply not possible because there is always at least 1 condition (namely that the wallet the buy order uses never has enough isk in it) that cannot be met.

Whoever originally found this was a clever puppy! Big smile


Obviously, you have not tried this. Let me enlighten you:

Say you set the inflated BUY order for 100m, of which you only pay, say, 50m in escrow because of the skill. If someone sets a SELL order to meet your required quantity, with low enough price so that the total is LOWER than your escrow, your scam is countered.

The point is that in order to make profit while countering the scam, the inflated BUY order price has to be really high, hence "under certain circumstances" in my first post.
Mordus Angels
#14 Posted: 2011.10.12 15:51
If it looks like a scam:

IT'S A SCAM
WSpace; Dead space.

Lady Spank for forum mod
#15 Posted: 2011.10.12 15:55
U mean not all margin traders do it......
Amarr Empire
#16 Posted: 2011.10.13 09:03
Tyrnaeg en Varche wrote:
Ms Freak wrote:
You obviously didn't read the OP properly, let me clarify for you:

The BUY order (the inflated one) is created at say 100m isk total and a MINIMUM of 1000 items. The WALLET the buy order is for only has 50m in it because of the margin trading skill.

If someone was to attempt to sell 1000 items to that buy order it FAILS because there's only 50m in the wallet and 100mil is needed to pay the seller.

If someone tried to sell 10 items to that buy order it FAILS because theres a minimum sell quantity of 1000.

The whole point of this scam is that you CANT counter/ruin it, it's simply not possible because there is always at least 1 condition (namely that the wallet the buy order uses never has enough isk in it) that cannot be met.

Whoever originally found this was a clever puppy! Big smile


Obviously, you have not tried this. Let me enlighten you:

Say you set the inflated BUY order for 100m, of which you only pay, say, 50m in escrow because of the skill. If someone sets a SELL order to meet your required quantity, with low enough price so that the total is LOWER than your escrow, your scam is countered.

The point is that in order to make profit while countering the scam, the inflated BUY order price has to be really high, hence "under certain circumstances" in my first post.


Roll I feel like I might be getting troll'd here but i'm gonna roll with it anyway for a bit...

I tell you what - why don't YOU try to do what your saying is possible. Get an alt to set the situation up and give it a go. If the person creating the buy order has the margin trading skill and leaves the associated wallet @ 0isk then there is no way for you to complete the order.

If there is a buy order on the market for 10 items of 1mil isk each and you put up a sell order for 10 items at 800K isk each then you will be paid 10mil isk. This is because the buy order controls the price paid. This, coupled with the minimum items is what makes this work.

I assure you that you cannot in any way shape or form sucessfully sell anything to the inflated buy order. Even the Tippia agrees with my previous statements (and she's the one actively using it!):

Tippia wrote:

Ms Freak wrote:
The whole point of this scam is that you CANT counter/ruin it…well, apart from not buying from the inflated sell order, which is where the scammer makes his money.

…well, apart from not buying from the inflated sell order, which is where the scammer makes his money.

But then again, “not falling for it” might not really count as “counter/ruin it”.
#17 Posted: 2011.10.13 09:15
I'd just say it's an exploit. That it can be done shows another CCP-made hole you can drive a Fenrir through.
(What IS a fenrir anyway???)
Dont fight it; Rejoin your Amarrian patriarchs; You know you want to.
Gallente Federation
#18 Posted: 2011.10.13 09:28
Pok Nibin wrote:
(What IS a fenrir anyway???)


http://en.wikipedia.org/wiki/Fenrir

:)
#19 Posted: 2011.10.25 07:01
It's funny because it's true.
Shepard Wong Ogeko wrote:   CCP should not only make local delayed in highsec, but they should also require one be undocked to use it. Then, even the local spammers have some skin in the game.
Support a High Resolution Texture Pack
#20 Posted: 2011.10.25 09:28
I have seen other types of scams on the market, but its the first time i've run into this one. I applause the person that came up with it. The other scams ive seen could be avoided by just paying attention, but this one makes everything look legit (besides the its too good to be true, are they that lazy thought) But I can see a skilled person making alot off of this. Koodos
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