Regular readers of this column will know that I use set prices for both digital and paper to calculate the MTGO-to-Paper ratio, a metric that can signal whether an online set has value or not. The theory is that when an online set is cheap relative to paper, it should attract buyers who intend to redeem their digital sets into paper. This activity drives up the price of the online set as cards are removed from MTGO.

This effect is most noticeable in the price of mythic rares, the redemption bottleneck. Understanding what redemption is and what it means to the MTGO market place is important, so read up on it here. The first version of the ratio is analyzed at further length in this column.

The original ratio used Supernova prices for MTGO, and Star City Games (SCG) prices for sets. This formulation gave a good sense of relative prices between sets, but with SCG prices remaining relatively static, it basically just ended up tracking online prices. Back-testing this ratio showed the predictive powers to be somewhat weak, although it confirmed the underlying theory. See more on how I back-tested the original ratio in this article.

Dropping SCG prices in favor of a more dynamic paper price seemed like it would improve the analytic results. Also, the redemption fee for all sets after Return to Ravnica (RTR) was increased from $5 to $25, meaning that comparisons between sets would be weaker if this change was not accounted for in some way. It became obvious that the ratio needed an overhaul, so from June onwards I began tracking TCG prices (h/t to forum user WeQu for the data) in order to calculate the ratio. I wrote about the overhaul here.

One criticism of the overhauled ratio was that TCG low prices weren't a good representation of a set's value. With this in mind I began tracking how the ratio for TCG Low, Mid and High moved over time on a daily basis, starting with the release of M14.

The latest iteration of the core set has been available online for three months now, so the data represents a good sample of the set release period, the opening of redemption and then the shakeup to Standard with Fall rotation.

In the above chart, daily percentage changes in each version of the ratio are plotted on the vertical axis. The ratios are all normalized to 100% on August 21, 2013. This was the online price bottom for M14 on Supernova at 82 tix.

The general movement in the ratios is downward as the release events in early August inject supply into the market, a general uptrend as redemption opens in September, and then an acceleration of the uptrend in October as the release of Theros (THS) and Fall rotation shake up the Standard environment. These are all expected trends confirmed by the movement of each of the three versions of the ratio.

However, it's obvious that TCG High prices are volatile and prone to data points best described as outliers. There are also times where TCG High prices are moving in the opposite direction of the Low and Mid prices. As a tool, it looks like the High Ratio is strictly worse than either of the Mid and Low Ratios. It's included here only as a curiosity.

Similarly, the Low Ratio is more volatile than the Mid ratio. So, it appears that the MTGO-to-Paper ratio calculated with TCG mid prices is less noisy and the best version of the ratio. Going forward, I will continue to collect daily data on all relevant sets, but the Mid Ratio will be the favored version of the metric.

Analyzing M14

Between August 21st and October 31st, the M14 Mid Ratio increased by 50%. One question for online speculators is how much of this change was due to increased MTGO prices. Well, the set price on Supernova went from 82 tix to 129 tix, an increase of 57%, while TCG Mid prices went from $272 to $261, a decline of 4%. This is basically as anticipated.

Redemption has been lowering paper prices slowly but surely, while at the same time supporting online prices. Interestingly enough, most of the MTGO price increases are tied into the rares of the set. Notice that Mutavault is currently the most expensive M14 card at around 20 tix. In the post-mythic era, I'm not sure there's been another Standard legal set where the priciest card was a non-mythic rare.

As more players migrate away from THS Limited towards revisiting RTR block or M14 draft, the price of a card like Mutavault will come down, regardless of its use in Standard. As supply of the non-mythic rares builds up and prices come down, more redemptive value should accrue to the mythic rares. If, like me, you are still holding many of the junk mythic rares from M14, there will be higher prices on these in the future so don't rush to sell them just yet.

Comparing Theros to M14

With the release of THS in early October, WOTC changed the entry requirements and the prize structure for release events. In particular, 16-person on-demand sealed queues had a reduced entry fee combined with reduced prizes. With the older prize structure, grinders would relentlessly enter the sealed queues and then sell off their prizes and opened cards in order to play in more queues. This reduced prices on both boosters and secondary market singles.

Using the daily value of the MTGO-to-Paper ratio (TCG Mid prices), let's compare how this metric changed over time after the set release date for M14 and THS.

In the above chart, the Mid ratio for both sets is plotted on the vertical axis starting with the release date. M14 is missing the very first data point, but the overall impact in the prize structure change should be clear. With M14, a flood of supply quickly lowered prices with a large drop in the first week of release events. In comparison, the THS ratio started much lower, but generally stays higher than the M14 ratio over time.

Things are complicated a little by the Pro Tour event in Dublin where many cards from THS were in the spotlight with the success of blue devotion strategies. The hype around PT THS brought online prices up the weekend after THS was released (Day 4 and Day 5 approximately). After the Pro Tour wrapped up, prices came down to Earth.

The New Release Queues

WOTC's intentions behind the change to the prize structure were not clearly outlined. However the results have been that booster pack prices are less volatile than in previous sets, and it's taken longer for THS prices to plumb the post-releases depths. It looks like the change was put in place in order to increase price stability. From the viewpoint of the MTGO-to-paper ratio, they have succeeded.

There are two things to take away from this analysis. First, booster pack prices will not crash after release events start. This means that boosters from the new set should be accumulated during prerelease events in order to make a quick flip to drafters after these events finish.

Because prerelease events and drafts are tix only, booster packs are worth relatively less at that time. Once release events start up, boosters are usable as part of event entry fees. This makes them worth relatively more and the change in relative value is a good short term opportunity for speculators. In this case, a little bit of work can pay for a couple of months of your subscription to QS.

The second takeaway is that prices still come down over time and that the change to the prize structure has only had a marginal effect. Supply is still coming into the market, bringing prices down. It has just taken a bit longer than it has in the past. MTGO users should be looking to pick up their play sets of relevant cards right now, i.e. just prior to redemption opening.

With at least eight more months of THS being drafted, speculators must avoid making long-term plays on cards from THS, especially non-mythic rares such as Thoughtseize and Hero's Downfall. These rares will be coming down in price over time, and speculators should not be considering taking any medium- to longer-term positions on cards from THS at this time. The one exception is for junk mythics and junk rares, which are fine to buy at 0.35 tix or less and 0.05 tix or less, respectively.

At these prices, cards are already at their bottom so lately I've been buying the odd Polis Crusher. It's doubtful this will be another Nightveil Specter, but a card priced at junk that is hostile to enchantments should not be ignored while there are two more sets to come in an enchantment block.