The Wide Beta Spotlight: Update
As you are no doubt aware, the Wide Beta Spotlight was cancelled. This removed a unique opportunity to observe how the MTGO's secondary market would work without at least some of the major bots operating. While a bit disappointing, speculators should always be making plans and executing strategies with the best available knowledge, adapting to inevitable surprises and learning from mistakes.
Fortunately WoTC seems to be adopting the same philosophy. Forcing a half baked client on MTGO users looked like it was going to be an error. The process of transitioning to the new client will be interesting as a premature move will cause a market crash. Cancelling the spotlight indicates WoTC is wary of repeating past mistakes.
Short Term Trading
My philosophy when it comes to speculating is usually dominated by the fundamentals of the MTGO market. Redemption, rotation and seasonality are the top of my list for trends to stick to. They are straight forward, and trading strategies based around these major themes don't require a ton of analysis or time to implement. They do require patience though, with some trades needing a number of months to bear fruit.
But it can be profitable to deviate from this type of fundamental investing. The price movements on MTGO can be sudden and large, so having a feel for short-term trades is a good skill to develop once you have the hang of the basics.
From now until the Fall, the set values for Innistrad (ISD), Dark Ascension (DKA), Avacyn Restored (AVR) and M13 are all destined to drop. But individual cards will still fluctuate in value depending on their utility in constructed formats. Essentially this is engaging in stock picking in a bear market. The overall trend is bad, so for casual speculators it's best to pay attention to the broader trend and steer clear of this strategy. But for more sophisticated speculators, there's still opportunity for profits.
Reading the results and commentary from the first SCG Open of Dragon's Maze Standard gave me some ideas. With Jund and Reanimator still on top, it looked like Thragtusk's reign as the top creature in Standard was set to continue. This is where I went to mtggoldfish to examine the recent price history of Thragtusk and determine if there was an opportunity.
The chart looked favorable. Thragtusk had some price weakness prior to the release of Gatecrash (GTC), when it hit the 8-9 tix range. Following that, there was a period of price strength until the start of April.
It looked like 9 tix was a short-term price floor and with the renewal of interest in Constructed that always occurs with a set release, the price should go higher in the short term. With the early results coming in for Standard, Thragtusk being at a short-term price floor, and the preoccupation of MTGO users with Cube draft, all signs pointed to a favorable short-term trade with low risk and the potential for 4+ tix in profit per card.
Taking a Position
After getting interested in Thragtusk, the next step was to examine the state of the market. This involved scouring the classifieds to get a sense for the depth of the market. If there were a ton of humans selling it for 8 tix, then it was probable that the 9 tix posted at most bots was too high and that a price drop was looming.
This is not what I found. There were relatively few humans selling Thragtusk, and most were trying to sell in the 9 to 10 tix range. This indicated to me that players were not actively willing to sell this card at market prices. Once this became apparent, I felt it was time to start buying. It looked like there was a good opportunity available and I set my buy price at 9 tix or less.
In order to start buying, I do a search for 'Thragtusk' and then buy any listing I see that matches or beats my buy price. Goatbots was selling at 8.75 tix, so I bought a bunch from them. Nova also had a few copies for less than 9 tix. Various other bots had them around 9 tix, including cardbot, but I only bought one play set from them.
Cardbot deserves special attention because it is one of the longest running smart bots around and has introduced numerous innovations to the MTGO secondary market. More importantly though, many other bots (and humans) rely on them for pricing in some form or another. By electing not to clean Cardbot out of Thragtusk, I was able to accumulate a substantial position without alerting the broader market to what I was doing. This extends the period in which making speculative purchases is possible. After I had taken my position, I posted to the QS forums.
After confidently going deep on Thragtusk, I started thinking about other short-term opportunities. Similar thinking suggested that Geist of Saint Traft was also a good short-term buy, especially since Pat Chapin examined Bant Hexproof in his article from Monday. Mike Flores was also playing Bant Hexproof in the SCG Open. Both of these writers can move the market to some degree by influencing what decks players adopt and try out. A resurgence in hexproof strategies aided by the printing of Unflinching Courage seemed to be in the offering.
Going deep on Geist, for similar reasons to Thragtusk, was an easy decision. Geist of Saint Traft also has the added benefit of being a Modern staple, and interest in Modern should be stoked by the release of Modern Masters. Adding this all up suggested a short-term window of opportunity clearly laid out for this card.
This type of short-term speculating is somewhat riskier and requires more attention be paid to the market. With the effects of rotation looming, the window to potentially sell cards at a profit is smaller, and a distracted speculator might miss out on a price spike. Know your risk tolerance and your ability to pay attention to the market before engaging in short-term opportunities such as the ones described here.
This is a brief rundown of what I am buying, selling and watching in the market.
- Nothing to sell this week.
- Gatecrash (GTC) boosters have been bouncing up and down in the 2.9 to 3.0 range, and I continue to buy these every day in order to build my stock. I expect prices to rebound in the second half of May and packs are liquid enough that I have no qualms about buying these at the moment. There's no upper limit to how many I would buy at prices less than 3 tix.
- Restoration Angel, Geist of Saint Traft and Thragtusk have all seen recent price dips. All are Standard staples and when they hit or came close to short-term price floors, I couldn't resist wading in and buying up a bunch with a short-term flip in mind. Each of these were mentioned in the forums.
- I'll be paying attention to paper tournament results now that DGM has hit Standard, in order to get a sense for future metagame shifts.
- Thundermaw Hellkite, Huntmaster of the Fells // Ravager of the Fells and Hellrider are all cards with short-term potential. Similar to my three buying targets from this week, they are all close to a short-term price floor and are played in Standard.