It's been a little over a year since I've started writing on a regular basis for Quiet Speculation. At first I was afraid that I'd run out of ideas and things to write about. It turns out, the more you write, the more ideas you get!

But more importantly, this column has given me ample opportunity to analyze what works and what doesn't work when speculating on MTGO.

Focus on the Fundamentals

Paying attention to the fundamentals is responsible for the majority of my profits. Speculating on MTGO is dominated by three fundamental factors: drafting, redemption, and rotation. Keeping these factors in mind when assessing a potential spec will ensure positive returns.

Drafting

At it's core, MTGO is a program people use to booster draft easily. Having the next draft just a few clicks away is incredibly addictive and it makes limited play the most popular activity on MTGO. It also means that drafters and their collective actions dominate the digital economy.

The current set is always in steady supply and thus it will sit at a relatively low price. When that set is no longer drafted, supply shrinks and prices normalize.

When you are looking at stocking up on staples, buy them while the set is still being drafted in order to ensure low prices. Buying low and selling high is pretty straightforward online. Outside of metagame shifts, you only have to ask yourself what is currently being drafted and when will it stop being drafted. Let the market take care of the rest.

That's the supply side of drafting, but the demand side from drafters is just as important. They need digital boosters to draft with, so being able to sell boosters to drafters means you can realize consistent profits buying and selling these objects.

The current set is awarded in prizes for both limited and constructed play. Over time, this leads to a high supply of boosters and a depressed price on the classifieds. All things being equal, boosters should go for around 4 tix and this is the price they gravitate to over time. Once a particular booster is no longer awarded for constructed play, the supply will steadily dwindle and the price will rise.

This pattern is very exploitable. In the weeks prior to a new set release, start buying up the set that is currently being given out as prizes for Constructed. It should be at or near its bottom at that point, around 3 tix. After that, it only requires two to four months to see the price creep back towards 4 tix, yielding profits in the 10-30% range.

Now the percentage gains might be small, but boosters are extremely liquid. This means that if you need tix, it's easy to sell these. The market for boosters is also extremely competitive so you don't give up as much to the bots when buying and selling boosters.

Overall, booster speculating has high predictability of returns.

Redemption

This is a subject I often refer to in my writing, but it bears repeating. Redemption is the link to paper prices that ensures digital objects have some value. For speculators, it means that mythic rares always have some value to redeemers.

If you are buying up cards that are currently being drafted, pay attention to junk mythic rares. These can get quite low in price during periods of heavy limited play and they are a lock for profits down the road.

Recent examples include cards like Darksteel Forge and Ring of Three Wishes from M14. The sell price for these got as low as 0.25 to 0.35 tix during release events. The current buy prices at Goatbots is 0.45 for Darksteel Forge (one in stock) and 0.46 for Ring of Three Wishes (zero in stock).

These two cards have already yielded small, but predictable, profits. They will probably creep higher as we get into October.

Rotation

Redemption ties in with Fall Standard rotation as another source of predictable profits. At rotation, cards often go from being important cogs in Standard to basically worthless. Demand for tix is also high due to release events for the Fall sets.

Combined, these factors ensure that prices have only one direction to go and that is down. For casual cards, the prices can bottom any time around October, but for competitive cards, the prices usually bottom at the end of October.

While the market is selling and prices on rotated cards are dropping, you should be the one buying. Eventually players will stop selling their cards for tix and prices will stop dropping. At that point, online sets can be very attractive to redeemers. They get to buy digital cards for low prices, redeem the sets, and sell at higher paper prices. Demand from redeemers ensures a steady increase in mythic rare prices from rotated sets.

But this process doesn't happen overnight, which allows the patient speculator to buy up cheap mythic rares and hold onto them until prices have normalized. The actionable strategy here is to buy up mythic rares from rotating sets in October and November, and hold onto them into the winter.

The other factor that will ensure profits is playability in Modern. This is a growing format and it looks like it has successfully established itself online in the Daily Events, which fire steadily.

The strategy here is to buy up Modern staples at rotation and hold until the PTQ season. In the first two years of Modern's existence, this mean until the winter. This year, Modern season has been pushed back to the summer. Nevertheless, I'll be picking up Huntmaster of the Fells, Snapcaster Mage and Liliana of the Veil in the coming months.

Rotation means a steep drop in prices in general. Demand from redeemers and Constructed players will eventually push prices back up. All it takes for steady profits is a willingness to surrender tix for a few months and wait until prices normalize.

Avoid Marginal Strategies

These are three pillars of the MTGO economy from the speculators perspective. Unfortunately, and I include myself in this, it's easy to get distracted from the fundamentals and to take on marginal strategies.

Speculating on Legacy and Classic would fall into this category. These are niche constructed formats without much of a player base, so one should avoid speculating on these cards. If it's a niche market, it should be a relatively small part of your portfolio.

Another marginal strategy is to bet against the fundamentals. My foray into speculating on Thragtusk earlier this year falls into this category. As a non-mythic rare, this card had no redemptive value. It was still being opened in limited play (Core Set sealed deck and draft both fire throughout the year on MTGO). Also, rotation was just around the corner.

Literally I went against all three of the fundamentals when I decided to speculate on Thragtusk. Quite the blunder.

It's easy to get excited about a marginal speculative strategy, especially in the Spring and Summer. By that time of the year the best specs are mostly wrapped up and one probably has an account flush with tix. It's easy to talk yourself into putting those tix to use because otherwise they are just sitting there. Unfortunately, the tendency to want to "do something" led me to pursue a strategy which just didn't have much going for it.

Straying from the fundamentals is an easy way to start losing tix. We shouldn't be trying to reinvent the wheel, but rather focus on what works and maximize the strategies tied to the fundamentals. The next two opportunities tied to the fundamentals include buying M14 boosters and picking up cards from Innistrad block.

Buying M14 boosters during Theros release events is a sure fire way for small profits. They should be dropping into the 2.8 to 3.0 tix range at that time. By December, players will have gotten their fill of triple Theros drafts and will be looking for something else to do. By that time, M14 boosters should be back in the 3.4 to 3.6 tix range.

Otherwise, I'll be loading up on Innstrad block Modern staples after Theros release events have finished up. Be sure to keep a few tix handy for the best buying opportunity of the year.