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blankseplocked Can there be a formal futures exchange?
 
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EBANK Ricdic
Eve-Tech Savings n Loans
Posted - 2008.03.15 05:15:00 - [31]
 

Why would you want CCP to design such an exchange. Only 1 out of 20 corporations would be legit. It would just be another way for scammers to scam.

CCP Chronotis

Posted - 2008.03.15 13:04:00 - [32]
 

Shares are a completely different beast to futures. They are representations of perceived value only of a corporation. Therein lies the greatest flaw, determining that value and having it as anything other than a scam mechanism. The most I would like to see is a way to offer shares in contracts. There is very little value I see in a formal exchange as the most we could offer is exactly the same as the market, an order matching service.

Futures however, have nothing to do with corporations, revenues or raising capital and derive their value from underlying instruments which we can properly measure through the market itself and have value between producers and manufacturers. In short it has much more scope for being used and better implemented. The question is then, is it needed since buy orders for the most part are adequate to most people.

I would certainly like to see both a share contract and a futures contract itself, and I am putting some time in to researching player insurance contracts as they are an effective forward contract so those with money and capital could offer insurance to people in return for regular premiums.

Ambo
I've Got Nothing
Posted - 2008.03.15 16:53:00 - [33]
 

Originally by: CCP Chronotis
I am putting some time in to researching player insurance contracts as they are an effective forward contract so those with money and capital could offer insurance to people in return for regular premiums.



wow Shocked

Daeva Vios
Posted - 2008.03.15 17:01:00 - [34]
 

Edited by: Daeva Vios on 15/03/2008 17:01:25
Originally by: Ambo
Originally by: CCP Chronotis
I am putting some time in to researching player insurance contracts as they are an effective forward contract so those with money and capital could offer insurance to people in return for regular premiums.



wow Shocked


Wow indeed.

I suppose I have to ask for clarification. Player-run insurance would be interesting and I can see it put to use on such things as modules and implants, but unless it's backed by the removal of NPC insurance I don't see it being popular.

Am I missing the point here? It is fairly early in the day for me. Would you be removing NPC insurance and replacing it with a player-run system?

Yangoor
Posted - 2008.03.16 11:20:00 - [35]
 

Idea to add to the mix

removal of the NPC insurance market would not be required as it would complement player run insurance market until the system is mature enough to be self sufficient.

On insurance, that players could create insurance bonds premiums that will only insure assets that get destroyed in a PVE environment "mission running, exploration" but not PVP in a war dec scenario or by other peeps.

So can have two or three insurance basic types for ships.

PVE insured ship usage mission running, exploration likely hood of being destroyed not much, but payout will cover the actual market rate, Officer fittings not sure if feasible but Tech 2 likely.

PVP insured ships,as in real life are not insured in a war zone, only in peace time, so a likely hood of being destroyed very, policy is very costly coverage is the mineral value in isks, length on insurance can be alot less then 3 months.

PVE & PVP mix is the current NPC insurance market.

So their is ways to make money if a war dec happens then the insurance becomes null-and-void, either you don't fly your PVE ships in war-dec or have war-dec insurance for specific ships ie corp supplied as one idea. so many ways too look at it, but alot of loop holes as well. Like suicide ganking. faster Concord response and 0 payout

my 0.01 isk worth

and i would be very interested in a futures market that covers minerals, compounds and T2 components,

Yangoor

Selene D'Celeste
Caldari
The D'Celeste Trading Company
ISK Six
Posted - 2008.03.16 21:22:00 - [36]
 

All I have to say is that Chron has single-handedly restored my faith in CCP's development team. <3

Now all you guys need to do is get a better budget for your QA testing. =P

Priest Amarr
Amarr
Temple's Gate
Posted - 2008.03.17 02:48:00 - [37]
 

Edited by: Priest Amarr on 17/03/2008 02:51:24
Originally by: EBANK Ricdic
Why would you want CCP to design such an exchange. Only 1 out of 20 corporations would be legit. It would just be another way for scammers to scam.


This would benefit you more than it benefits me at the moment. Lets look at the possibilities together. You are founder of EBANK. This bank is trying to create its own stock exchange system. You will use websites and brokers for it. If it gets busy it will become time consuming and complicated.

Instead lets imagine a todays market like system is implemented. But shares can only be placed player outposts for sale, and only if outpost owner allows it. In this case there are couple possibilities. Your bank or any other bank in this matter can run their own stock exchange. It is giving you an automated tool which is already in game (just not open to shares). Since owning an outpost is not easy it also limits the possibility of every corporation setting up their own exchange. You still can select the shares can be bought and sold at your outpost.

Second dimension it adds is traders traveling and docking to your outpost. Which integrates banks activities more with game. At this moment financial side of the game is more run on web sites and forum and it requires minimal contact in Eve. Following this path, if players want to watch market live instead of using your brokers, need to travel your HQ (outpost) or they can train trading skills and stay somewhere in the region. Perhaps they will see and chat with other investors if they choose to dock your outpost. It will create more interaction in game. This can even go further when walking in stations is brought to Eve.

Third dimension it adds is now corporations in alliances will be able to put their own shares for sale at their dedicated alliance outpost. Assuming alliance didn't randomly admit corporations this has few chance turning into a scam. I believe it can add flavor to alliance and corporate management though.

I am aware that if you are not already owning and defending null space , this will add an extra difficulty to normal banking activities. On the other hand moving financial markets more in game offers more possibilities to residents and corporations of Eve. I am supporter of creating content and posting it on websites and sharing ideas on forums, but if Eve financial markets would start depending on websites that would mean people who can afford to invest more into website programing can outperform other corporations/banks in game. Since Eve promotes in game effort instead of usage of outside resources available to us , tools provided in game by CCP has a value to all residents.

Please take these as my contribution to subject and not argument. As a priest I would say "What is good for Eve is good for the Temple" at the end.

May Blessings Be With You
Priest Amarr

Hexxx
Minmatar
Posted - 2008.03.17 02:52:00 - [38]
 

I should point out...EBANK's exchange won't use brokers.

The only manual area in terms of administration will be approving an IPO application for listing upon the exchange. You may want to read up on my arguements around completely virtualizing an EVE stock exchange.

Kylar Renpurs
Dusk Blade
Posted - 2008.03.17 04:00:00 - [39]
 

Player-run insurance would help "fix" ("fix" because it's arguable if it needs fixing or not) suicide ganking.

Sofitia Mourtos
Zanjitsu
Posted - 2008.03.17 10:25:00 - [40]
 

Originally by: CCP Chronotis
I am putting some time in to researching player insurance contracts


In your research you might want to read up on my suggestion for exactly that (from back in 2004).

I know that since the kill-mails have changed the way it works is a little different. However the general idea is the same - we can start offering insurance if we are able to get (trustworthy) notification whenever something is destroyed.



Altaree
The Graduates
Morsus Mihi
Posted - 2008.03.17 13:24:00 - [41]
 

I think players would build something like this if they could get an api interface into the market prices. Without that it is a logistical headache.

Block Ukx
Forge Laboratories
Posted - 2008.03.17 13:27:00 - [42]
 

Originally by: CCP Chronotis
... There is very little value I see in a formal exchange as the most we could offer is exactly the same as the market, an order matching service.


I think you are underestimating the value of a formal exchange even if it “is exactly the same as the market”. I enjoy trading in RESX, one of the player run exchange. However, due to the exchange delay I tend to postpone many of my trades. I think a formal exchange will boost the stock exchange.


zzbooks
Fighting Cats
Posted - 2008.03.19 12:16:00 - [43]
 

Edited by: zzbooks on 19/03/2008 12:20:57
I do not see this as difficult for CCP to do, we just need a new type of courier contract.

The contract could be to deliver 10000 ferrogel to Amarr in 10 days time for 100mil isk, with a 20mil penalty.
If someone accepts the contract and delivers, the buyer can either buy the ferrogel for 100mil or pay a 20mil penalty. If someone accepts the cotract but does not deliver, they loose 20mil.
No need for margin calls.

This is simply a courrier mission, where the person accepting the mission has to provide the goods, instead of the mission creator. Both parties have to put the penalty amount into escrow to prevent exploits.

Ghreymar LaNayeur
Pariah Corp
Posted - 2008.03.19 18:19:00 - [44]
 

The problem with futures being a contract is that the contract market is woefully inadequate for any conceivable mature futures market. You can't modify orders, searching is time consuming...it would just be a nightmare

What i think would be better is if they made the market icon expandible like the apps button, and added a "market" and a "futures market", or just added another column in the regular market.

Futures are available only for materials, and there would be a tab for say 3 days, 1 week, 1 month, 3 month etc. They would just be a mirror of the regular market tab, kind of like how the blueprints tab is a mirror of the regular market.

Then you could just have buy and sell orders for each as normal, which would make it unbeleivably easier than having to deal with contracts.

The market it self seems like it could be a basically copy-paste-renamed version of the regular market, but there would need to be a mechanism for the deliverer of the good to "fill" the order...perhaps something akin to the 'deliveries' tab that has greyed out icons for each contract with a sort of XX/YYY remaining on mouseover or something, so that you could just drag and drop the material once it's ready/delivered.


The biggest problem with this that i can see is how do you stop someone from selling billions worth of futures on an alt, transferring all the ISK to their main, then recycle-rinse-repeat. Maybe a forward market would be better than a futures market?

Priest Amarr
Amarr
Temple's Gate
Posted - 2008.03.23 07:03:00 - [45]
 

While this thread is mainly about future exchange, please take a look at
CCP's point of view about stock market in 2003



Shadarle
Posted - 2008.03.23 08:19:00 - [46]
 

The problem with stocks as they are now is that the vast majority of EVE doesn't know they exist and wouldn't bother to try it out if it meant going to off-site exchanges. Obviously making an in-game market adds to the scam potential, but it also would make things far easier for the legit IPO's to function.

If nothing else it would be nice if some more attention was payed to this side of EVE. For example:

Allowing corps to div out more than 2b at a time to clean up reporting of divs.

The tracking feature that was already mentioned, so we know who sent us which shares.

The ability to see dividend history by viewing info on a particular stock.

The ability for a CEO to post a NAV which is auto-divided by the # of shares (this could easily be faked, but that is for each individual to research and decide if they trust the CEO or not) and it would be viewable through the info on each share.

The ability to put shares in contracts, which goes along with the tracking abilities listed above.

And add a lot more API functionality with shares, so more can be tracked out of game automatically.

All of those things would help greatly as would many others I can't think of off the top of my head.

Kazzac Elentria
Posted - 2008.03.24 02:16:00 - [47]
 

Originally by: CCP Chronotis
Shares are a completely different beast to futures. They are representations of perceived value only of a corporation. Therein lies the greatest flaw, determining that value and having it as anything other than a scam mechanism. The most I would like to see is a way to offer shares in contracts. There is very little value I see in a formal exchange as the most we could offer is exactly the same as the market, an order matching service.

Futures however, have nothing to do with corporations, revenues or raising capital and derive their value from underlying instruments which we can properly measure through the market itself and have value between producers and manufacturers. In short it has much more scope for being used and better implemented. The question is then, is it needed since buy orders for the most part are adequate to most people.

I would certainly like to see both a share contract and a futures contract itself, and I am putting some time in to researching player insurance contracts as they are an effective forward contract so those with money and capital could offer insurance to people in return for regular premiums.



The insurance is only one small step towards a formalized futures market Chrono. :)

In essence you are trading on futures with such an item. You are hedging an investment that you client will fail to claim on a premium. Allowing you to take that wealth and capitalize it for other things... you know to insure that you have the capital for those who do make claims.

It glees my heart that this is something in a possible works

It's not that far of a leap to create a formalized futures market.. the question for everyone else not on the side of the developer becomes... is it worth the effort?

IMHO the share system is broke anyway. They should be handled in the same function as negotiable bonds if given out. Actual physical items that require possession for payment. Then you can easily integrate them into the existing market.... viola a stock market would be born overnight.

Design it however you want.. but being able to sell them on the existing market would be the first step in the right direction... IMHO. I've been wrong before though so take it for what you will.

Alex Salas
Echelon Syndicate
Posted - 2008.04.11 00:14:00 - [48]
 

Originally by: CCP Chronotis
This is something that has personally interested me since I was valuing and auditing hedge funds before I was a dev Very Happy We have talked a little in the past about a futures market and subsequent iterations delivering options.

The difficulty comes in mainly the game mechanics needed with marking to market (huge proc in itself that would extend dt to much longer periods). Then creating a margin call transaction for the player to pay of that, then the settlement of the future (delivery or expiry) and essentially translating a very complex and regulated process into simple mechanics eve uses without taking the whole of our programming team to do it and a good portion of our db.

So, it stays on our 'would be cool if we could' list, but the technical resources needed to implement it always mean it would realistically have a low priority especially given the limited number of players that would use the futures and derivatives market. Though we can at least look at a standard forward contract perhaps which would be a much simpler extension of the current contracts.

Hopefully that gives you some insight as to why there is not one in eve yet.

edit: there is of course nothing preventing one of you operating your own exchange if you wanted to go to those lengths as the website linked above tried to. The main issue you would want to resolve is also the first purpose of the exchange before speculation which is business risk mitigation between primary producers and manufacturers who would offer the original contracts and a real desire or need for that to happen outside standard market buy orders.

The operator would then act as a trusted counterparty with margin call calculations based on market export data like that from eve-central for eg.



Really? What was your old firm, RK, Kinetic Partners, Big Four-FS audit?

What would your thoughts be in applying credit default swaps to EVE's bond offerings or would your counterparty analysis still apply?

Couldn't some sort of in-game board so to speak be coded that allows OTC products to be written/exchanged by players and the games algorithms can serve as a neutral party in calculating who pays for the swings in the basis point spread. Assuming a LIBOR EVE equivalent can be created.

Finideach
Posted - 2008.04.11 01:42:00 - [49]
 

One way to look at things is to take a step back from technology fixes. Let's not try to recreate the current sophistication of the real world markets right off the bat. Companies and individuals have been exchanging in company shares, running markets and even using futures/options far before there were databases, automation or communication faster than the horse could run.

How did they do it? How were shares traded and financial instruments moved throughout the Venetian houses or early British industrial financial periods? The population sizes of the participants may be closer to Eve's potential audience and there may be some valuable lessons learned.


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