Let's cut to the chase. I'm here to help you make money. I'm not here to entertain or impress you. I'm here to pass on what I know about Magic finance in a way that can be applied to your own personal situations.

A few quick notes about myself. I've been a Magic player for 17 years. I also spent two years in grad school studying game theory, especially in its applications to financial markets. As a result, my approach to Magic finance comes from a more theoretical perspective, which I aim to share in my articles.

About eight months ago I lost in the finals of an online PTQ, which presented me with an important decision. I could either redouble my efforts to qualify for the Pro Tour or call it quits and try something else. I chose the latter and decided to shift my focus to the financial aspects of Magic to see where it took me. The goal of my articles will be to communicate what I've learned so far over the course of this (ongoing) journey.

I'll start today by discussing the mechanics that underlie any successful trading strategy on MTGO.

An Argument for MTGO Over Paper

Over the past eight months I have been drawn heavily towards digital speculation targets as opposed to physical ones. Here's why:

1. Lower transactions costs. There is a distinct advantage to trading digital cards in that you can circumvent any costs related to shipping, wear and tear, sorting, etc. This effect multiplies when you implement automation through bots, by reducing opportunity cost in the form of effort and time.
2. Larger price fluctuations. There are typically much larger fluctuations in the prices of online cards. This presents a greater opportunity for profit.
3. Higher liquidity. In a matter of minutes you can sell hundreds or even thousands of cards. The faster buying and selling process lets you take greater advantage of price fluctuations with a higher total number of transactions.

For these reasons I will primarily dedicate my articles to speculating on MTGO.

Tools of the Trade

In order to make money buying and selling on MTGO, you must first understand the mechanics that make it possible. These mechanics can be divided succinctly into four categories:

1. How to buy tickets with cash
2. How to buy cards with tickets
3. How to sell cards for tickets
4. How to sell tickets for cash

(Although it is certainly possible to buy and sell cards with cash, I have not found any practical uses for it and therefore do not discuss it.)

One of the very first things I did when I wanted to learn about MTGO finance was to read every single article written by Sylvain Lehoux and Matthew Lewis on QS. I cannot recommend this enough. Over the span of their articles, they cover all MTGO mechanics in detail, and much of what I know about these mechanics (and all of MTGO finance in general) I learned from them.

1. Buying Tickets With Cash

For most people, MtgoTickets will be the go-to place for buying tickets. To my knowledge, it is the cheapest place to buy tickets without running the risk of getting scammed. Because mtgotickets.com themselves have to deal with scammers, you may be limited on the amount of tickets you can buy from them. When you hit your quota you'll have to find alternatives or buy directly from the MTGO client.

In the absolute best-case scenario, you'll be able to buy tickets directly from a trusted individual at even cheaper prices than a store like mtgotickets.com.

Overall, I feel this step is not of particular importance. The difference between the best- and worst-case scenarios isn't great, with ticket prices ranging from $0.85 to $1.05. The amount of money you make from speculation will hinge much more on the quality of your investments.

If you shift from a biannual 20% portfolio return to 40%, it will take just two years to almost double your money, due to the increased quality of investments. Your main focus should lie here.

2. Buying Cards With Tickets

Now things start to get interesting. Buying can be broken down into two broad categories:

1. Buying cards with a bot
2. Buying cards manually

Botting is a more advanced technique that trades off lower quality pricing for higher scalability. I think it makes sense to first understand manual trading and then graduate to botting when you want to scale.

If botting sounds interesting to you, I would check out mtgolibrary.com to get your feet wet. That's the software I use since it's crucially linked to a centralized price listing in MTGO Wikiprice.com. ClanTeam will also provide botting software, and I'm sure there are further options besides them. This will be a topic for future articles.

So, manual trading. MTGO is made in such a way that trading between humans is possible but extremely unwieldy. To buy or sell a card to another human you can search for a particular card on the classifieds, although this will almost never work out. The vast majority of your manual trades, therefore, will be done with a bot.

How do we pick the best bots to trade with? It begins with a solid understanding of the bot credit system.

One of the awkward features of the MTGO economy is that the main form of currency cannot be divided beyond a single ticket. The current solution is for bots to save fractional credit that can be used on future trades.

This is how I conceptualize bot credit in my decision-making process: assuming a uniform distribution of leftover credit, when you choose to use a bot you are paying a 0.5 tix sunk cost to gain access indefinitely. Let's say you intend to buy five cards, lifetime, off a new bot. You'll break even if you make at least 0.1 tix profit per card. If you instead plan on buying 100 cards lifetime, you'll break even with at least .005 tix profit off of each card, and so on.

You can imagine that for good bots, you will be buying thousands of cards and the decision to start using these bots will be a no-brainer. Some bot credits can be used across multiple bots that form a "bot chain." For these bots the initial 0.5 investment effectively allows you access to every bot in the bot chain.

The best strategy for buying cards manually from bots is fairly intuitive. If you want to buy a particular card, search for the bot that offers it at the lowest price. If you have already been using that bot chain, grab the card. If not, consider whether the new bot chain is worth investing your 0.5 tix sunk cost. Eventually you'll get a feel for which bots are likely to have the best prices and just check between your trusted bots.

My current routine is to check MTGO Wikiprice, Goatbots and Cardbot. Sometimes I will also check ClanTeam bots (mtgoclanteam.com). The nice thing about these websites is you can see prices without having to open a trade within the client. This can save valuable time. Here's what goatbots.com and mtgowikiprice.com look like:

A note on bot pricing. Since many bots don't have access to any kind of real-time pricing data, they use their own algorithm to slowly arrive at the correct market price. The algorithm works like this: If they're getting more sales on a card than buys, they slowly increase the price. If, on the other hand, they're getting more buys than sales, they slowly decrease the price.

This means bots usually will sell you up to a playset of a card at a time and increase the price on every subsequent playset (or decrease the price if you're selling to them). Sometimes you can game the system a bit by buying three copies of a card, and then four more copies, all at the original price. (I've had it work for me before on Goatbots, but sometimes it switches to the higher pricing on the last four copies.)

Remember to add bots to your friends list. This way when you're searching the classifieds you can opt to search only within users that are on your friends list.

3. Selling Cards for Tickets

Selling cards for tickets is analogous to the buying process. Find the best bot chains and find the best buy prices. Sometimes bots with inflated sell prices will also have inflated buy prices. Keep your eye out for these. As with buying, the selling process can be automated through the use of a bot if scalability is needed.

4. Selling Tickets for Cash

Selling tickets for cash is likewise similar to buying tickets with cash. Mtgotickets.com is likely your best reputable source. A trusted individual will again always be the best option. It's also worth noting that Goatbots.com will buy tickets but only if you are selling 1,000+ at a time. Recently, I read on the MTGO reddit that MTGOtraders.com is another option for selling tickets.

~

And that's about it. If you made it this far, you should now understand the basic mechanics underlying all trades on MTGO. I've kept things as concise as possible---we'll delve more into the finer details in later articles.

There are a lot of directions I can take this column in, and I'm interested to know what topics you'd like me to cover in future articles. Some for your consideration:

• Theory of pricing (and its application to Magic)
• Theory of decision-making under uncertainty (risk management)
• Dynamics of MTGO market trends
• Tracking and recording MTGO investments
• Running a bot for profit
• Machine learning as a tool for prediction

Let me know in the comments sections if these or any other topics pique your interest. I'm excited to be writing for Quiet Speculation, and hopefully I can contribute to a better overall understanding of the MTGO market in the finance community.

Thanks for reading,

- Luca Ashok