Dragon's Maze (DGM) will be the 3rd set in the Return to Ravnica (RtR) block. It will be released in paper on May 3rd, 2013, with an expected online release about ten days later. The release of DGM will have value hunters licking their chops due to the 3rd set effect. Compounding this effect is the release of Modern Masters in June which will cut into the amount of RtR block drafting that occurs. Between DGM and Modern Masters, the last half of Spring should be a wild time for speculators as Standard absorbs the new set, and Modern absorbs the impact of a bunch of reprints.

Leaving Modern

In the meantime, speculators are looking for a place to park tix, but we are entering a lull in terms of good speculative opportunities online. Modern season has just wrapped up and savvy speculators should have already sold out of most their Modern staples at this point. Any remaining Modern stock one might have will now be subject to price decreases due to declining interest in the format as well as the looming impact of Modern Masters.

With the shift to Standard season, Modern will transition to a more stable metagame, which also does no favor to speculators. A metagame that changes quickly leads to prices rising and falling, and that kind of volatility brings tidy profits if one has been holding out-of-favor, but useful, cards. On the other hand a stable metagame produces a stable price environment, all things being equal.

Wither Standard?

When looking closer at Standard, opportunities for speculators are dwindling here too. The priciest and most volatile cards are mostly from Innistrad block. These will begin to come under selling pressure as forward-thinking players and speculators look to get ahead of the curve when it comes to rotation.

Last year, by March 20th of 2012, all three sets from Scars of Mirrodin (SOM) block had already reached their price peak and were starting to drift down (check out the indices section on mtggoldfish to see what I am talking about). That's a strong signal to avoid speculating on Innistrad block cards from here on out. Doing so would mean fighting against the overall direction of the market, which is not where a speculator should be looking for opportunities.

Looking towards cards from Return to Ravnica (RtR) and Gatecrash (GTC) offers some potential for speculators, and there's plenty of analysis on cards from these sets elsewhere on this site. But let's consider an alternative investment vehicle for the moment.

What to Do in the Meantime

Booster packs offer one area which might yield small but low-risk profits. In considering using boosters as a speculative vehicle, the value comes from the price discount available on the classifieds when compared to prices at the MTGO store. A quick perusal there will find RtR packs for 3.2 to 3.3 tix and GTC packs for 3.10 to 3.2 tix. These are priced at a discount because boosters are sold into the market by players in order to acquire tix, which they then use to enter more drafts or constructed tournaments.

In terms of liquidity, boosters are some of the most liquid digital objects. The market is deep and the bot margins for in-print boosters are very small, sometimes as low as 0.05 tix. A small margin reduces the risk for speculators as positions can be exited quickly without giving up too much in transaction costs.

Looking at the current prices on boosters from Innistrad block, there is Innistrad (ISD) at 4.34 tix, Dark Ascension (DKA) at 2.5 tix and Avacyn Restored (AVR) at 3.96 tix. These prices give an indication of what we might expect from RtR and GTC boosters in the future. The two large sets from ISD block are roughly at par with prices from the store. This suggests that there is no excess supply of these packs available on the market. If there were an excess supply, then prices would be lower as market participants would be seeking to sell these packs before they become useless to drafters.

The current low price of DKA boosters flags the downside risk of speculating on packs. Keeping the upside potential and the downside risk in mind will help to judge whether speculating on packs at the moment is worthwhile.

Currently, GTC packs are awarded for play in various formats, including Standard and Block Constructed. For this reason, we can immediately discard GTC boosters as having any short-term upside potential. The steady supply of GTC packs into the market provided by constructed players looking for tix ensures that the price on GTC packs will be biased downward, not upward.

Additionally, drafters tend to "solve" the average draft format after a couple of months. Some formats, like triple ISD, offer a huge amount of depth and thus maintain interest longer, but these types of drafting environments are the exception rather than the rule. It's likely that in a few weeks, a large fraction of the drafters online will be getting somewhat bored with triple GTC drafts. The potential for the combination of dwindling demand and a rising supply of GTC boosters points to GTC packs as a poor short-term spec.

RTR Booster Packs

Unlike packs of GTC, we can expect supply of RtR not to increase because it is no longer awarded as prizes for constructed tournaments. This suggests that the price of an RtR booster will be demand driven and not supply driven.

Lately, the price of RtR packs has been stable in the 3.2 to 3.3 tix range. That price took a dip during GTC release events as demand for tix increased during this time period. Players were temporarily valuing tix higher than RtR boosters, which depressed prices. Once GTC release events finished, players were no longer willing to sell RtR packs at a discount so the price rose.

If drafters shift their attention away from GGG and towards RRR drafts, then the supply of RtR packs will steadily fall without fresh supply hitting the market from constructed events. As available supply is reduced, the price will come under pressure to rise. Eventually, whatever excess supply of RtR exists will be consumed. This will trigger a price increase and the price on RtR packs will begin to approach 4 tix.

The last point on the bullish side is to consider that demand for RtR boosters will spike up during DGM release events as RtR returns to the current draft format after taking a break during the period of triple GTC drafting. Once DGM is released, any observable trend in the price of RtR packs will accelerate. If the price drifts up to 3.4 or 3.5 tix by that time, it won't be long before they jump closer to 4 tix. If they are still around 3.25 tix during DGM release events, keep your eye out for a price bump which would indicate the inflection point where demand is rapidly reducing available supply.

What's the Downside?

Always, always, always consider what could go wrong on any trade. Last year, DKA (as well as ISD) was awarded as cube draft prizes. This flood of supply has depressed the price of DKA packs for an entire year. The market is still working through the excess supply from the cube prizes and from the period where DKA was awarded as Constructed prizes. It's possible that there is an equally large amount of RtR packs sitting on the sidelines. Ultimately it's not knowable how many packs are floating around.

However, DKA was only part of the most current draft format for a short while, the period where it was DII drafts. With the release of AVR last year, drafts with DKA were no longer the most current draft format. RtR will be in demand from drafters once DGM hits which gives us a key difference between DKA and RtR packs when considering the downside risk.

Secondly, the risk of RtR being awarded as cube draft prizes in a similar way to DKA has to be considered. This too seems unlikely at this point. WoTC has shifted towards awarding cube tix as well as a small amount of out-of-print boosters as prizes for cube draft. They seem to be aware that the popularity of cube can destabilize the secondary market and are cautious around doing this. The change in prize structure indicates the likelihood of seeing a flood of RtR packs due to cube is very small, which is another reason that RtR will be more like ISD or AVR and not like DKA.

The Guarantee

Previously I've offered price guarantees on certain speculative positions that I was very confident in. After studying the risks, I am confident enough in speculating on boosters that today I am going to offer another guarantee. For interested speculators, the substance of the guarantee is as follows:

Purchase twelve RtR boosters on the secondary market at the best price you can find. If you have not sold or used these boosters by July 1st of 2013, I will offer to buy them from you for a total of 40 tix. In other words, for a small quantity of boosters, I am offering a price guarantee of at least 3.33 tix per booster and taking all the risk away from you on this speculative position.

For those who want to take me up on this guarantee, simply enter a comment on this article stating that you are taking the offer and then go ahead and buy 12 RtR boosters. When July rolls around, if you are sitting on those boosters and want to unload them, I will buy twelve RtR boosters from you for 40 tix, at an average of 3.33 per boosters. Based off of current prices on the classifieds, this guarantee ensures you will not take a loss on this position. On the upside, you might be able to sell these for 3.8 tix by the release of DGM, a potential 15% gain if you purchase at 3.3 tix.