Reminds me of my pokemon card days in elementary school. I started with ~5 cards a friend gave me and somehow traded up to a deck of 400-500 with a decent amount of holographics too.
The only time I ever bought cards were a couple booster packs, but that was after I already had 200 some.
Good times.
The art of trading comes from knowing that value is relative, you just need to find the people who want what you have more than others.
Not exactly. Arbitrage is exploiting mispricings of the same item in different markets.
For example, say you buy an iPhone from Craigslist for $100, then turn around and sell it on Ebay for $150, netting you $50.
Or conversely, you get an iPhone for your birthday for free, sell it on Ebay for $150, then buy a second one from Craigslist for $100, netting you an iPhone+$50.
That's arbitrage. It sounds like makeramen's Pokemon trading all happened in basically the same elementary school market.
It's certainly the same market, however it's still hardly a level playing field. There's social niches, even in elementary schools, that people generally avoid drifting out of, however a nomad can drift between these niches and exploit mispricings in an individual market.
It's not so much changing market, but being a supplier who looks for clients who haven't met the other suppliers in the market. It wouldn't be arbitrage, but it would be a nice way of exploiting newbies in a market. Sort of how Bestbuy profiteers off of having a well recognized names whilst being far off from having the best prices (I bought a surge protector the other day that they were selling for $20 more than the place across the street, I was smart enough to bring the other stores flyer and got 10% off extra).
> Arbitrage is exploiting mispricings of the same item in different markets.
There seem to be narrower and wider definitions of arbitrage. Some narrow definitions require arbitrage to be risk-free. Some wider definition accommodate things like statistical arbitrage (http://en.wikipedia.org/wiki/Statistical_arbitrage), which is far from certain and doesn't even use the same items, but just items with correlated prices.
True. A broader definition is probably 'exploiting price differentials of correlated assets'.
Market is irrelevant, and both 'same item' and 'different but correlated items' are both subsets. And 'mispricing' presumes there's a true value, which may or may not be case.
My personal definitions are backwards from that: I just define `mispricing' as anything that allows arbitrage. (Especially risk-less arbitrage. But you can -- in theory -- make almost all arbitrage as risk-less as you want, with the right derivatives.)
depends on what you consider to be the market(s). the north and south sides of the playground might have rather different valuations of a card. if you can realize that and safely transport your goods that distance, you've got an opportunity.
I guess that when I think of kids trading cards like Pokemon or Baseball cards, I envision kids from different social strata all religiously reading the Pokemon websites and having a similar idea of the value of the cards.
But having done no card trading of any kind myself, I wouldn't really know, that's just an assumption based on a few observations and anecdotal evidence.
The only time I ever bought cards were a couple booster packs, but that was after I already had 200 some.
Good times.
The art of trading comes from knowing that value is relative, you just need to find the people who want what you have more than others.