The typical Magic card trading wisdom is something along the lines of “buy low, sell high.” Others refer to it as “survival of the fittest.” There is a ruthless, winner-take-all, zero sum mentality that permeates through the culture from top to bottom. Unfortunately, many small-scale traders take this sort of mentality to heart, and ripping off a new player at the local store is their way to feel like a big-time player in the finance game. This sort of mentality is destructive to the health of the game and communities.
From another perspective, typical “value” trading grows increasingly difficult to do in a world where pricing information grows increasingly more accurate and obtainable every day. Of all the trades I have done in the last year, only a handful haven’t involved a smartphone on either side checking prices on TCGplayer or one of the various pricing apps in widespread use.
When neither party is able to take advantage of a pricing knowledge gap, trades are likely to be executed fairly in a pure value sense. Also consider that the more the community is aware of prices in general, and the more people are attempting to extract value, there is less value to go around.
Looked at it from either a moral or practical sense, attempting to execute classic value trades by exploiting a card pricing knowledge gap is not a valid strategy. That being said, there is plenty of value to be gained from trading that benefits everyone involved.
When trades are executed at even value, both parties are effectively just moving cards around. From a value perspective, nothing is being accomplished. No value is being gained by either party, but also consider that nothing is being lost. This has some important implications.
Trading Eliminates Transaction Costs
Trading eliminates transaction costs. If two parties can get together and work out a trade where they each get what they want, then everybody wins.
Imagine two cards, X and Y, each worth $10. Now imagine that I want card X for my deck, and you want card Y for your deck. If we get together and trade, and you discover that I have card Y, and I see you have card X, we can make an even trade where everybody wins.
Now, what if we never got together? Maybe I wouldn’t have had any use for card Y, and I would have just buylisted it away for $7. If you couldn’t find card Y in a trade, you’d be forced to spend $10 for card Y online, perhaps plus a shipping cost. If we both acted in this way, then something like $6 or more would vanish from our mutual collections and our community.
In that scenario, trading allowed each of us to turn our cards into something valuable to us, but without losing any value on the transaction. If we each buylisted our cards and then purchased what we needed, then we both were forced to attrition away our value to a third party.
This sort of trading is particularly great for fostering a Magic community at the local level. Assuming the goal of everyone is to play more Magic, more fun and engaging, more deep and dynamic Magic, then having more cards and thus more options makes that happen. Trading allows us to all get what we want and get to playing, and it allows us to keep our card value right in our community, as opposed to bleeding it out to some far-away store.
Trading for Speculation
Trading is a great way to achieve speculation goals, especially given what we now know about its minimal transaction costs. Trading is an excellent way to change the specific composition of a collection, even if the actual dollar value remains the same after each transaction. If trading just moves cards around between people, then having a goal in mind and strategy to achieve it is important, and speculation is one such strategy.
Speculation is attempting to take advantage of perceived metagame and market fluctuations in the future. In this case, value is created by the forces of time. At the basic level, it means trading for cards that you expect to rise in price in the future, and conversely, it means trading away cards that you expect will fall in price in the future. The best speculative trades are ones that trade away cards expected to fall for cards expected to rise, which accomplishes both goals at the same time.
Trading as a method of speculation requires planning ahead. One must develop a strategy based on their future expectations, which can be tricky, but luckily anyone reading this article has access to the wealth of information available from QuietSpeculation Insider articles and the Insider forums to help make those judgments.
On a practical level, speculative trading requires tailoring a trade binder with speculation goals in mind.
Trading partners will view anything in the binder as up for trade, and no one likes the person who has a binder littered with cards that they “just aren’t looking to trade right now.” Identify the cards you want to hold for the future, physically remove them from the binder, and store them in place dedicated to your speculative holds. In the trade binder, these cards will only serve to distract trade partners, waste time, and possibly even sabotage your entire trade.
Conversely, stock your trade binder with cards that you are looking to get rid of. If someone is interested in any of those cards, trade them away for anything you expect will maintain value. As time goes on don’t be afraid to trade these away at a discount for cards on the move upwards, because if you are right about your speculation, given enough time your assumptions will be realized and your cards will no longer be worth what they once were. Also, people often discount cards when trading up to expensive high-end cards, so these are perfect candidates for that sort of transaction.
It could be argued that speculation takes advantage of an information gap the same way that value trading does, but in reality, it comes with significant uncertainty and risk. It’s also important to realize that trading partners are acting under their own agency and volition. Their reasons for trading aren’t necessarily in line with yours.
While you may be trading away a card because you think it will be reprinted, they may be trading for it because they need it for a tournament that weekend. You could be trading for a card you think will rise, and they may be trading away part of their old deck so they can construct an EDH deck for their group game with friends. It’s a simplistic explanation, but assuming everyone gets what they came for, it’s win-win.
Trading to Buylist
Buylisting is the easiest and perhaps the most efficient way to turn cards into cash. For someone who buys large collections for profit, is looking to liquidate or downsize their collection, or incorporates buylisting into their overall Magic finance strategy–or simply needs a little bit of spending cash–trading is an excellent way to achieve buylist goals.
Buylisting is interesting because it is quite variable based on the conditional needs of stores. Two cards may be worth $10, but one might have a buylist price of $8 and another a buylist price of $6. If you are knowledgeable about buylist prices, which Trader Tools 3 puts at your fingertips, then trading can be an excellent way to get the most out of what you have.
Here is a simple example: I trade my $10 card X, which buylists for $6, for your $10 card Y, which buylists for $8. The trade was an even value for both parties, but in a buylist sense I actually netted $2 profit, and that is without sharking someone.
This also opens up the opportunity for sharing this value with a trading partner. If for example, I trade my $10 retail/$6 buylist card for your $9 retail/$7 buylist card, we both made money. It’s also possible to take this value as extra profit, for example by balancing the trade with a $1 retail card. This facet of trading to buylist is especially important to keep in mind when trading up at a discount for a high-end card, because giving away value may actually lead to increased profit.
Trading also an especially excellent way to achieve buylist goals because of its ability to manage the condition of cards. Buylisting at full value requires near-mint if not mint cards, and often many cards in a collection won’t fit the bill. Most trade partners I encounter aren’t too concerned with the condition of cards beyond very glaring damage, usually because they just want cards to play with. Even if the trade partner is concerned with value and places a premium on condition, if the premium is less than the premium the buylist places, the result is still trading played cards for near-mint cards for a net buylist profit. Trading is a great way to turn cards that aren’t in near-mint condition into cards that are near-mint, which ensures the capturing of full buylist value.
Wrapping It Up
Trading need not be a zero-sum game. Both parties can be self-interested, yet both parties can profit. By employing the strategies I shared today, you can get the most out of trading while adding value to your trade partner along the way. What other trading strategies unlock value hidden within cards to the benefit of all involved? Share your thoughts in the comments.