@zukaus, I think he's defining "getting screwed" as him paying his price of 35 DKP for game x, but then a bunch of trades going off at a much lower price, drastically lowering the Phase 2 IPO price. So he's automatically a loser on paper, to the tune of 7 DKP per share, in his example. Regardless of where the position ends up, he's a loser right off the bat, is what I think he's driving at.
@zukaus, It was my understanding that the Phase II price is made off of the average of all the bids places, with weight given to the larger bids over smaller bids, so if you place a 1000 share order at 25 and someone else puts a 10 share order at 35 your order will weight more heavily on the price than theirs will.
In general I find the pay off is not worth tying up my money for that long, so I wait for phase II to roll around before I take positions on stocks.
I'm sorry but your math is difficult to follow. It seems like you automatically assume that if the current highest bid is at 15 DKP and the current lowest ask price is at 35 DKP in Phase 1 then the stock will open in Phase 2 at approximately 25 DKP which is just not always going to be true.
I can't be sure but I believe the Phase 2 price is determined by getting the mean or some average of all trades that actually went through. So all trades actually went through at 35 DKP then the Phase 2 price should be at 35 DKP regardless of the bid and ask prices. Perhaps there were even other orders that went through earlier at 40 or 45 this could cause the Phase two IPO to open up even higher.
Obviously the phase 2 price can vary a lot and if you think the current best ask price is going to be higher than what you believe the Phase 2 IPO will settle at then you are right, don't buy, wait. But what's to stop you from putting in your own bid to buy shares at 28 DKP or 25 DKP? How about 15.01 DKP? Maybe you can get in at an even better price.
All I'm saying is that trading in Phase 1 can be profitable and not every trade is a ripoff. Phase one is high risk, high reward.
Sorry If i assumed that, because thats what I would do, if I would have your kind of "money" to my disposal.
The thing is, why should I buy from an open order in Phase 1 if I get it cheaper in phase 2? Even if I think I make a win out of open at phase 1 I wouldn't do it, because I can make a higher win if I wait for phase 2 or shortly after that.
Lets make an example: Lets say game X has the highest buy order at 15 and the lowest sell order at 35 dkp. I'm willing to invest a million DKP or arround 50000 shares. I think the game would do 50dkp. I can now buy in phase 1 and lose automaticly money (for the time being) in phase 2. Or I can wait, buying at aprox. 25k at phase 2 worth of 200 thousand DKP, wait that phase 2 ends buy it up with another 800 thousand DKP to 28-29 DKP. If I take the open orders, I'll buy them at 35 DKP averaged, otherwise at 28 DKP. Thats why I don't do Phase 1, I make more money otherwise.
Yes I say people with money have an advantage, did I say it is bad to use it? No! Those are the rules of the game we are in, and I would do it if I would have too much money not invested. That advantage could go away to some degree with a closed IPO system, depends on how it is implemented, it could also be a even higher advantage.
I have never said I was against a closed IPO system, please don't assume I am. I was just pointing out that not everybody gets screwed in Phase 1 IPO trading. And for the record I've never really made a lot in Phase 1.
However, I have played both sides of the IPO trade. I've taken open orders and have had my open orders taken by others and I've won and lost on both sides. Ultimately neither the buyer nor seller really has an advantage, after all it really just comes down to the price you get. If you bought at the right price you win, if not you lose.
It may seem like there's only really bad prices that are being put up in Phase 1 and you can only get screwed, but remember it's those poor offers which are likely to stay up on the books while the more reasonable offers disappear. Don't take those poor offers just because they're the only offers available. Set your own price or wait for a better offer, you only lose in Phase 1 if you overpaid or undersold.
Now it also seems like you're saying that people who can put up open orders have an advantage. Well that's true but that's just the power of money. If I have the free cash I can put up the open orders to try and set the price. But those advantages have less to do with the IPO process and much more to do with how much free cash I have.
I do think that a closed/blind IPO system would be interesting and more realistic but I think it would be difficult to implement and currently there would be very little to be gained in trying to work out such a system.
I think the IPO process and all it's phases are actually working quite well, although I would like to see the maximum IPO investment cap raised. Most games seem to be priced well, with relatively equal number of buyers and sellers on both sides. Also in the future as we gain more and more people here on theSimexchange and more people learn how the IPO process works the Phase 1 bid/ask spread should continue to shrink and perhaps maybe one day you'll reconsider taking open orders if the price is right.
Additionally, in an attempt to bring this thread back on topic I think the reason why there is relatively light Phase 1 trading for FFXII:RW is simply because it's a difficult title to predict. It has many advantages, it has the Final Fantasy name, it's being released on the wildly popular DS, and it's coming out during Christmas. But at the same time there are some disadvantages that will likely keep it from being a blockbuster. First it looks like just another FF spinoff and second it's not even a true turn based JRPG, it's some RTS/RPG hybrid. I'm not surprised that early traders are cautious in pricing the December futures.
@Joe80, I just prefer to have my money in stocks that will actually make me money instead of putting in an order that takes up a couple hundred thousand of my available DKP and sits there for 2 days. I just consider the payoff way to low to bother, so I don't touch a stock until it goes to phase 2 usually.
Yes of course there is. I didn't say it burns money total, but thats the reason why there is nearly no trading in phase 1. Either put up a open order and hope somebody trades with you, OR don't trade in phase 1 at all. If everybody follow that rule, there will be no trading in pase1. I know you don't want a closed IPO because you most likely make a lot of money on the IPO phases, because you have the money to do a lot of open orders.
I don't have a problem with anybody doing that, they just follow the rules of the game. I just say the rules are the reason why I don't trade in Phase 1, because they are not designed to encourage me personal to.
3
VGChartz claims 900,000 copies sold for the game globally. Stock may be a bit high.