If you're a Magic speculator who isn't active in the MTGO markets you are doing it wrong.
Becoming a trader on Magic Online (MTGO) is the easiest way to leverage your existing expertise to increase the value of your collection or make money. You’re already tracking cards and formats, so you might as well put that knowledge to work. Once you learn the tricks of the MTGO economy you’ll have a foothold in a frictionless market that offers strong cyclical patterns and excellent returns.
I don’t even trade in paper anymore because it is so much easier to make profits on digital and then just purchase whatever cardboard I might need. In making the switch, I’ve said farewell to buying mailers, packing cards, listing on eBay or TCG Player, opening mail, sorting huge stacks of cardboard, searching for a card that just spiked... I don’t miss it at all.
MTGO does offer some barriers to entry, which is one reason the returns are so strong. The market for digital cards is opaque and confusing, and operates somewhat differently from paper. Plus you have to learn to use the client, which has a longstanding reputation as a bear to navigate. (The client has actually gotten much better, especially for trading, and is pretty easy to use once you learn the interface.)
There are a number of great resources on Quiet Speculation to help you get started. In a future article, I will provide an index of these that will help you get started on MTGO trading. In the meantime, if you’re still not convinced, here are 10 advantages that MTGO speculation has over paper speculation:
It is incredibly easy to buy and sell cards on MTGO. Say goodbye to shopping auctions, scouring TCG, or calculating PucaTrade points. You can open the client, search prices, purchase the card, and receive it immediately---always in the promised condition.
No haggling with buyers who say they didn’t get their cards, no PayPal fees, no calculating shipping, no stocking up and storing shipping materials. Basically, all the things you hate about buying Magic cards disappear. Click and it’s yours. Click and it’s sold.
2. Predictable Cycles Based on Redemption
The MTGO market features a major price driver absent from paper markets: the redemption cycle.
I plan to cover this more in depth in my next article. Redemption is the process through which digital cards are turned into paper cards. It creates very predictable cycles of supply and demand that allow you to profit, at very low risk, if you know when to invest. If you're already an Insider on Quiet Speculation you have lots of resources to help answer that latter question.
On MTGO, your next spec is a click away. In the time it takes for your paper cards to arrive in the mail, you could have sold your target for a tidy profit, reinvested it, and cashed out again. It is this extraordinary velocity that makes MTGO so attractive. Cards spike and prices adjust immediately.
There will be MTGO speculators who buy cards today, on the first day of the Pro Tour, sell them tonight at a profit, invest those profits into new targets, and sell those tomorrow when they appear on camera. If you know the power of compound interest you’ll recognize how powerful this engine can be. I am not a high-velocity trader (I don’t have the time and inclination) but it is a very lucrative trade for those skilled in the MTGO market.
4. Booster Speculation
Speculating on boosters in the paper economy is cumbersome and involves long time horizons. In contrast, booster prices on MTGO follow predictable cycles and are easy to buy and sell en masse. The margins are generally low but the profit is secure. Moreover, the small spreads on boosters mean they are a liquid asset that still offers a return.
A good recent example is Shadows of Innistrad boosters—as I suggested in my last article, you could have snagged these when they dropped as low as 3.6 tix during the prerelease events and rose to nearly 4 tix within a day. A 10% return in 24 hours with virtually no risk? Sign me up.
5. You Can Play With Your Specs
In paper, if you want to play with a speculation target, you need to keep track of its location, un-sleeve and re-sleeve, etc. On MTGO, it’s seamless to add your cards to decks and binders. In fact, if you spec on 4 Lion's Eye Diamond this week (which I highly recommend, as they just dropped in price and are set to bounce back as Eternal Masters approaches) you can play them in Dredge, Storm, Belcher and Oops, All Lands! until you decide to sell.
6. No Shenanigans From Buyers and Sellers
Remember that time a store modified your order right after a card spiked, claiming they couldn't sell you more than a playset? That doesn’t happen on MTGO. Nor does the buyer who tells you they never received their package, or that the cards weren’t in the right condition, or that they want to return them.
7. Zero Transaction Costs
I like to spend my capital on spec targets, rather than bubble envelopes, binders, sleeves, shipping fees, PayPal fees, TCG commission, etc. On MTGO there are no transaction costs. (The one exception is if you choose to operate a bot but, as you'll see, there are ways to keep those costs to a minimum as well.)
8. Sell From Anywhere
If you’re working in paper and happen to be traveling when the ban hammer strikes or the metagame shifts, you’re up a creek. If your cards are digital, it’s easy to log on and sell out from anywhere with an internet connection. The MTGO Forums keep you posted on what’s coming down the pike.
9. Fewer Collectors, More Players
On MTGO, there are fewer collectors. The economy is driven by players who just use the program for drafting and don’t plan to keep the cards. This means at certain moments it's easy to snap up cards from out-of-favor decks or formats at a deep discount.
The seasonal swings on Modern are quite lucrative. MTGO players have a very short-term perspective and don’t recognize their cards as intrinsically valuable the same way paper players do. This creates great opportunities for speculators.
10. Big Returns
Sylvain Lehoux's “100 tix, 1 year” project resulted in a 642% profit margin. Matthew Lewis is another master speculator who has generated thousands of tix in profit. Learning from them and others, I grew a meager collection to the point where today I can play any deck in any format and still have tix to burn on Limited.
There are lots of other QSers making a killing on MTGO, and a very collaborative community in the forums. And almost all of us do this with a very modest time investment. These types of returns are very hard to achieve in paper unless you devote a ton of time.
Alright, I got to 10 already and haven’t even touched on arbitrage, botting, mythic foils, or other winning plays.
There is a literal wealth of information available on the QS MTGO forums and article archives (I'll point you to some of my favorites in my next article). If you already have a subscription, you might as well check these resources out. Otherwise, I recommend starting with Sylvain's “100 tix, 1 year” project or Matt Lewis' discussion of redemption to learn more about the basics of the MTGO market.