I wrote an email to some people, and figured I would post it here as well.
I’m never engaged in .01 isk wars. People who do that, or worry about that, have no idea how the market works. The fact that CCP’s announcement described .01 isk wars as the “optimal” strategy is indicative that they don’t actually know what’s going on, and they haven’t talked to any real traders. .01 isking is what noobs do, and what noobs complain about, but it’s not what real traders do. I get mails all the time from people complaining about me “killing the margins”, because I actually know what the item is worth, and I’m not going to waste time .01 isking at some price ten or twenty percent off from the actual market price.
The vast majority of Jita buy and sell orders are never completing, even though people are constantly .01 isking them, because they are all too low or too high. Actual traders come in and dump something on the market well below the lowest sell order, or put in a buy order well above the highest buy order. These tend to sell out fast, but sometimes the market turns the other way and they sit there for months. I had some orders take over a year before they made a small profit, but that was fine as it was comparable to what I might earn with a typical real-life investment.
I can understand that CCP would want to eliminate .01 isking, as it is probably a strain on their servers, and I have no objection to the 4 significant figure rule (although perhaps 5 significant figures would be a little more flexible). I generally already do this myself. On an order that is a million per unit, I will generally go up or down by ten or twenty thousand, sometimes 100 thousand, sometimes just a thousand, but never .01 isk.
My concern however is the stifling tax upon anyone who changes their price, combined with the tax upon any order that takes more than 90 days.
With these new taxes, low margin high volume trading is very high risk with very little reward. I don’t think traders are going to be inclined to participate.
I tend to engage in wholesale trade, as that is what I used to do in real-life. Most of the product in EVE and in real-life is being initially traded through wholesale. Industrialists come to Jita with a freighter (which yes, I try to gank), and they want to unload it and get isk. This is important to their business cycle, as they need the isk now, so they can return to their factory and produce more. They don’t have time or capital to babysit a sell order, so they will sell to a buy order, but ONLY if the price is high enough. The wholesaler has capital and offers a fair price, often significantly higher than the other buy orders (which act basically as Jita pawn shops). By buying in bulk, I obtain a discounted price and actually obtain the product, but I also assume the risk of trying to sell the item.
With these new taxes, the risk of the wholesaler will increase. Why would I want to buy 2000 Warp Scrambler II, and resell them for 0.5% profit, if I run the risk of a loss because they don’t sell within 90 days? So I will hesitate to offer high buy order prices, as will other wholesalers, which means that industrialists will hesitate to produce. The market will eventually adjust in some way, but this will not occur quickly, causing instability and volatile prices.
When I place buy orders, industrialists see that I’m offering a higher than normal price, which signals them to produce… but if I don’t place the order in the first place? The result will be a shortage, and sell order prices will steadily increase until the industrialists finally produce and sell the product themselves. However, this will result in a glut of new sell orders, with an exaggerated boom and bust cycle. I suppose what I’m saying is that wholesalers act to moderate volatility, which is why they are exempt from sales taxes in real life. Without capital invested as a buffer in warehoused surplus, the market is inherently unstable.
I’m not entirely sure whether these changes are good for the game, but I am quite certain they will severely undermine the market’s efficiency. Much of EVE is already an economic wasteland, and most systems and regions are almost devoid of trade. These changes will further stifle trade, and it will become increasingly difficult to find reasonably priced items on the market. The removal of margin trading will just amplify this problem. Traders simply won’t be able to make large long-term orders, and so the orders won’t be placed at all. People who do place large orders will find their capital tied up for long periods of time, and they will hesitate to place those orders again in the future.
Several of you stated that contracts will get used more, and I think you are right, but haggling and barter is hardly an ideal means of doing business.
Ultimately, I think savvy traders will take their market business outside of the EVE client. Large orders will be negotiated via Teamspeak, Discord, etc. I might have 50 Leshaks, but I’m not going to post them on the market and risk getting penalized by a bunch of fees. I think for the average player, the market will simply appear irrational, with supply drying up overnight, and prices soaring, and then suddenly products being dumped at extremely low prices. The instability seen in places like Hek will become increasingly normal in Jita. I’m not sure if that’s what CCP wants, or if that’s good for the game, but I do think that will be the result.
Anyways, hope you enjoyed reading my long rant, I’ve been drinking some coffee and trying to decide whether it’s time to skill extract all my trading skills.
JayGatsby