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bizpro

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Mittwoch, 10. Mai 2006, 23:21

Arbitrage

This is the arbitrage for dummies, like myself, version.

We all know that the founding fathers of arbitrage are from the TSR board and Baltic Trader is one of them. Ugh! then refined the art and developped an MK 7 version for maximum profits. I managed to use one-ship versions with moderate success and have come up with a simplified increased profit version. You'll need a 700 holk, and two 350 crayers, all with minimum crew and a captain with trade skills of 4+.
The process:
  • for the two selected goods, i.e. IG and cloth, check that the administrator neither buys nor sells.
  • set the minimum stock to 350 and check it to ensure that the auto convoys don't take the required goods
  • use the buying and selling prices from Ugh!' table
  • step one : hulk buys maximum of both goods on market, each crayer loads maximum of one good from warehouse
  • step two: holk unloads all into warehouse, both crayers sell maximum to the town.


It does not matter if the market has sufficient goods in stock, your sellers will provide the. By always loading max from warehouse and selling max to the town the consumption of the town is taken care off. And, since each crayer only deals in one good, it does not matter if some remain on board.
Every hub is well suited for this purpose, since all high-profit arbitrage goods should be available in ample supplies. And who says you can do with with just two goods?
Anyone who has never made a mistake has never tried anything new
Wer niemals einen Fehler gemacht hat, hat noch nie etwas neues probiert Albert Einstein

Dieser Beitrag wurde bereits 1 mal editiert, zuletzt von »bizpro« (10. Mai 2006, 23:34)


Alan

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2

Samstag, 24. Juni 2006, 21:21

May I join the Dummies class?

Let me see if I understand this. I set an autotrader holk to buy IG at 400 and wine at 339. I set an autotrade crayer to sell IG at 220 and another to sell wine at 184. They all have 4 or 5 trader captains. The office does not trade. The office keeps 350 on hand at all times.

Why do the sellers have good captains? I thought I read that the captain's skill only helped in the buying.

Why do I need to keep 350 on hand? I know it's the size of the crayers, but they cannot touch it and the regular convoys cannot touch it either. Maybe you keep 350 IG around for building, but I've never been that aggressive. And I do not use wine for building (and don't throw parties if I can help it).

Why can't the office sell? Is it a timing issue? I remember reading that the office only trades once a day; is that it?

Do these convoys have to be tightly in sync?

I have lots of cloth and a cash flow problem; I think I'll try the simpler version (one or two snakkias) and see how it works.

Anne Bonny

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3

Samstag, 24. Juni 2006, 21:49

Alan:

I have had a lenglthy session with bizpro on his arbitrage version and think I can answer your questions.
  • Your understanding is correct. But, the requirement to keep 350 as minimum stock is not necessary since the administrator does not trade and all convoys need acess to all the goods.
  • The administrator does not trade to prevent him from interfering in the arbitrage.
  • Even when selling a good trade captain does get a bonus. Also, a captain does up to 4 trade cycles per day while the adminstrator is limited to one.
  • All ships have to be in sync. When the buyer empties the market and drives to price up the seller loads in the warehouse and sells in the next cycle at a profit.
  • You might want to sell off some of your cloth to get enough starting cash. Around 100,000 is needed in surplus cash to start arbitrage. However, after one month your cashflow problems will be solved. :D In one town I use two holks buying/selling just IG and thery make around 100,000/day.
  • If you have only 2 snaikkas you may not be able to buy enough to increase the price the towns is buying to a level where you make a profit. IMHO only MK I arbitrage with high-yiled products, i.e. furs, is suitable for snaikkas.

Adalbertus

Chefmathematiker

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Samstag, 24. Juni 2006, 21:57

Alan, to answer your questions:

- The sellers don't have to be good traders. They always sell at nominal price.
- There is only a point in arbitrage if you can provide for the good to trade :) . You can tell the administrator either to sell everything if he gets the money for it, or to keep at least n goods when selling to the market or to keep at least n goods when selling to the market and loading to ships. As you want to automatically load all goods to the crayers/sellers, you can't use the latter version to keep the stock . Therefore, you must tell every automatic route to the town not to load the goods you want to do arbitrage with (this is nothing to tell the administrator, what you might have thought). For a reason I'll tell below, it is not wise to make the administrator to sell the arbitrage goods to the market himself. During arbitrage, the market will keep what it needs.
- If you keep 350 on hand, you'll get maximum profit in case the city grows to a size that it can cope with this amount.
- Indeed it is a timing problem - the office sells always at the same time once a day. The ship trades approximately four times a day, but four trades take slightly more than one day. Which gives the next point
- About synchronisation: In fact it turns out that you'll tie down twice amount of goods in two portions a and b.
1. crayers sell to market (a in market, b in store)
2. hulk buys from market (a in hulk, b in store)
3. crayer loads from store (a in hulk, b in crayers)
4. hulk loads to store (a in store, b in crayers)
5. - 8. the same with portions a and b exchanged.
so you have to start the hulk with buying from market in the time interval after the crayers sell and before they load from the store. There is one point where your competitors can disturb your scheme, and this is when there are quite a lot of cheap goods on the market. So you want to keep this state as short as possible. This means to start the hulk as quickly as possible after the crayers. Once you've started all three trade routes, they'll remain in that sync.
Man gewöhnt sich an allem. Sogar am Dativ.

Patrician Jr

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5

Samstag, 24. Juni 2006, 23:06

@ Anne Bonny:

You are correct, the 350 minimum stock is not needed to be locked. Since the town produces IG it continuously fills the warehouse but, the auto-convoy must be set to load all IG and then unload 350 to maintain the right level.
By having the seller load maximum on ecah loading cycle, you take care of the consumption of the town and the the arbitratge. If you check your trade notices you will notice that there are different levels of profit. That is because you sell more after the town has consumed its daily quoata of IG, which is around 15/thousand. So, if your town has 20,000 citizens it will consume 300 IG per week or around 45 per day.

@ Adalbertus:

I don't think I want to haul IG manually from every town that produces it. You keep the required inventory by loading/unloading during the two-cycle stop in port. I remember to have read somewhere that a captain also gets a bonus when selling

Adalbertus

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Samstag, 24. Juni 2006, 23:12

Patrician Jr, in general, your system will work, but in unfortunate circumstances you'll have all IG on the convoy at the moment the crayer wants to load it. Though, this will cost profit of one cycle only.
Man gewöhnt sich an allem. Sogar am Dativ.

Alan

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7

Sonntag, 25. Juni 2006, 06:28

I thank you all.

I was thinking about the level 1 arbitrage. But it sounds like I did not catch the need for large quantities of goods to force the large price swings.

Well, I've got the snakkias and the cloth, but not enough decent trading captains. I've also got some (former) pirate crayers and cogs, so I may use them. I'm not up to 350 crayers yet. I'm building pretty slow this game.

bizpro

Old Skipper - still on duty!

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Sonntag, 25. Juni 2006, 20:35

Thanks to a nice administrator I am able to sneak in a few minutes of internet. In my last attempt I managed to get two emails after spending 6 minutes and CAD35 on it. I will be back for Canada Day :banana:

Anne & Partrician are correct, you don't need to lock the 350 goods. As the population increases I am also up to single holks for buying-unloading to warehouse and loading from warehouse-selling. That's in all IG -producing towns and in my two hubs, where the average stock is over 1,000 barrels of IG. Lack of IG is a foreign word in my Hanse for several months now.

I replayed some months and am now past mid-1305. I should make the CV cut for the year and have over 400,000 citizens.
Anyone who has never made a mistake has never tried anything new
Wer niemals einen Fehler gemacht hat, hat noch nie etwas neues probiert Albert Einstein