What's wrong with Broker's fees and Trading bots

Hello, I’m making this post to discuss with you the way broker’s fees affect the market and its participants.

But let me please first introduce myself, I’m playing Eve Online since almost a year, and I spent the great majority of this time doing station trading and hauling between station. What really grasped me into this game was the realism of the economy and the mmo-sandbox aspect of the game.

Let’s get to the point,
when you put an order in the market you must pay the broker’s fee upfront (before the order is filled). My understanding is that this fee was introduced to discourage trading bots to undercut other participants orders by a small price change, since each time they do so they pay a fee to make a new order or modify an existing one.

If it was the goal I think it is really efficient at doing so but there is still a problem with this approach.

Since the fee is based on the total value of your order in ISK, the more your order is valuable the more you have to pay upfront. (Before any profit is made, so if the market didn’t fill you and left without you in the train, you must either accept the realized loss induced by the brokers fee or move your order close to the market price which will cost another broker’s fees although a smaller one)

What this actually incentivize is to post smaller orders and by smaller I mean the smallest value possible which is 1. Because if the market didn’t filled you and move far away from your order, the realized loss will be much smaller than if you put a big order.

And this is a loss for the players that trading bot can effortlessly avoid by sending only orders with the smallest amount possible. When their order get filled they add another one at the same price.

Although I didn’t find this practice common or bots that use this technique, It will still incentivize everyone to use smaller orders to avoid loss and result in a market harder to read since less big orders will be placed in the orderbook. And less liquid since people aren’t there 24/7 to update their small orders whhen they do get filled.

Let me hear what you think about it, and if you think it’s actually a problem or not, and if it is how you would solve it if you were working at cpp. :slight_smile:

What I think could be a better way would be to put a broker fee’s upfront but not based on the value of the order. It would still discourage bots from undercutting and make the competition costly, but it would not penalize big orders. Although I don’t know to determine the right fee.

Thank you for reading me,

Fly safe !

go away, bot sympathizer

The fee encourages traders to do market research before listing, so as to set a reasonable price that is likely to be fulfilled within 90 days. The shift is away from short-term ‘instant gratification’ sales strategies and into long-term investment in market activity, which bots inherently aren’t set up to leverage (bots are all about short term activity).

This does mean it can require more time and capital to get into the market, as the following are necessary for effective trading:

  1. expect most orders to remain outstanding for several days or even weeks instead of several hours - but even if you are initially undercut, your product is likely to sell long-term
  2. for low volume sales (where inventory moves slowly), listing fewer items in a single provides more flexibility in responding to significant price changes
  3. understanding market cycles becomes more important to avoid pricing high at the start of a downswing, resulting in an order languishing on the market for an extended period
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Also, if your item won’t sell in 90 days (like non-market-hubs or trying to sell skins) - then don’t use the market at all

The broker fee and transaction tax aren’t new. They have always been there and the last change was several years ago. Person who places the order (buy or sell) pays the broker. Person who sells the item (whether selling from a sell order or to a buy order) pays the tax. What changed and has made life more challenging for bots and high frequency traders is the relist fee - it’s a lot more expensive to change your price.

You’re already hurting your case in my eyes. Broker fees do encourage smaller orders, but trade slots are limited by skills, players will often buy or sell more than unit at a time, and I don’t feel like micromanaging a crap ton of 1 unit orders. I can’t speak for everyone, but I try to create “reasonable” order sizes, and I doubt there are people out there creating 10 million orders of 1 unit of tritanium each.

Now, for the idea that the current mechanics are beneficial to trading bots.
Um, no… not really. You can, of course, use bots to automate the process. But (1) the system does not seem to be particularly advantageous to bots, and (2) even you have said you have found no evidence of bots doing this. I mean, why would people run the risk of asset forfeitures and account bans for a dubious advantage?

I don’t blame people for not wanting to pay higher broker fees and being disappointed that they can’t 1 isk more casual traders. But the old system was quite advantageous to bots. Moreover, many players assumed they were dealing with bots even when they were dealing with autistic no lifers (like myself), which exacerbated the problem. Thus, the new system is definitely a step in the right direction (and this is coming from someone who was better off under the old system).

If you have a better solution, let’s hear it. All the ones I’ve heard so far, however, have been quickly ripped to shreds. Looks like designing a good trade system is harder than most of the critics realize.

Interestingly, I have found that a lot of my orders fill rather quickly without me needing to babysit them. I guess it’s because there is a lot less undercutting going on.

I think the system would be improved by allowing a free relist every 30 days.

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