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Sphere of Resistance: Finding Equilibrium Using the Golden Rule of Spikes

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Last week, we saw a giant sell-side spike on Sphere of Resistance.  We all kind of knew that the $10 price it hit wasn't "real", but we also knew that it was unlikely to return to its previous $4 level.

With these kinds of sell-side spikes, there has been a consistent trend of equilibrium;  the sell price tends to settle at the approximate mean between the pre-spike price and the spike maximum.  As you can see on today's chart, that is almost precisely what happened: (5.03+9.94) / 2 = 7.49, while today's price is 7.44.  This rough formula for predicting how spikes will settle managed to indicate the price within 5 cents.  Not bad for a rule of thumb!

Screen Shot 2015-04-20 at 8.57.36 AM

The kicker is that the buy price has rocketed up to meet the sell price, with a spread of 19% at time of publishing.  If you're new to QS, MTG Finance, or the idea of "spread", here's why this matters:  the spread represents how much less money you'll make when you sell to a buy list, versus selling at retail.  Generally speaking, spreads less than 30% are worth paying attention to.  Spreads less than 20% are probably worth acting on, and spreads less than 10% are very rare indeed.  So, a 20% spread on a card that many think is just baseless hype is probably worth considering.

There was an error retrieving a chart for Sphere of Resistance

The merchant who's willing to pay this premium is likely to get a lot of orders filled due to this narrow spread.  It's a great decision, because those who bought their spheres at the old retail price of $5 or less will now be eager to cash out.  It's a perfect time to bolster stock of an old, powerful card that might have a long-term future.

 

Kelly Reid

Founder & Product Manager

View More By Kelly Reid

Posted in Finance, Free, Stock WatchTagged ,

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