Stock Market -- How?

[Mason27]

I've been seeing threads about the global "market" that the online game will be using for players to buy/sell. My question is, how is this even possible?

 

Real stocks have outstanding shares. The reason a stock rises in value is based on the demand--like everything else, valued based on what someone is willing to pay for it. If there is no limit to the amount of shares that can be purchased, then what exactly is the share price based on? If it is simply based on the amount of money being thrown at it then that means that every sale will drive the price up.

 

That means that spending 1 billion on a stock will drive it up quite a bit (assuming that's how the game functions) and a quick sale will return a profit. I get how that movement will make others jump on board based on it's slight upward trend. However, all this tells me is that there will be constant bell curves for stocks, and it will simply be a matter of getting on and watching for the bottom and top. If that is the case, money will be made VERY easily, and with no cap and no backing on the in game dollar, players will end up with limitless money. The game world will be infinitely rich. Only those that don't pay attention to their investments are prone to losing their money (but even then, they could wait for another rise, since all players are going to buy low). Keeping the same IPOs in the game also doesn't make sense, either . Bailing on a stock would be pointless, as it is bound to go back up (unlike real life where it's sometimes game over).

 

Day trading is supposed to be risky. It involves PREDICTING the market, which this game really can't recreate. It also involves a lot of fees and taxes, which is why quick buy/sells are not always possible. Even with a 20% increase, you may lose out after taxes, capital gains and broker fees.

 

I never took economics, and I don't trade in real life. Someone feel free to correct me if I'm wrong.

Edited September 27, 2013 by Mason27

[2405]

Sounds pretty legit overall (gains taxes are on gains, so you don't have to earn 15% to break even, it's 15% of your profits at the end of the year, so it's easy to deal with). Buys drive it up, sells drive it down.

 

No limit on shares, and you don't have to fine a seller or buyer (or broker) to move your shares. But there is no limit on cash either (infinite money in the GTA Economy so this shouldn't be an issue).

[Racer__X]

The search button.

[Red XIII]

I've been seeing threads about the global "market" that the online game will be using for players to buy/sell. My question is, how is this even possible?

 

That's the beauty of games, mate. Anything is possible!

[Mason27]

I didn't mean how is their version of it possible, I meant how is one that works properly possible? I'm simply saying without a limit on shares--which requires users to buy/sell from each other rather than no one--and the fact that there is a set number of companies that cannot go broke, I don't see it taking very long until the entire community is able to afford whatever the hell they want.

 

I, personally, would have rather seen R* control these markets at random, or at their discretion (which would be a great way for them to balance out the amount of money in the world based on active users).

[tommyk86]

I have a feeling that Rockstar will somewhat control the markets. You are right that if the markets were based soley on the supply and demand they would conastantly go up. With millions of people playing and making more money through heists/missions and then buying stocks, there would just be more and more moeny going into the market and it could only go up. So i think R* has to somewhat randomly control it to keep balance.

[Mason27]

I have a feeling that Rockstar will somewhat control the markets. You are right that if the markets were based soley on the supply and demand they would conastantly go up. With millions of people playing and making more money through heists/missions and then buying stocks, there would just be more and more moeny going into the market and it could only go up. So i think R* has to somewhat randomly control it to keep balance.

Exactly.

 

Perhaps users only have minor influence against a predetermined/random/controlled market. If user trading completely controls the market, people are going to get so rich that they will be able to buy a large enough amount of shares that individual trades will cause it to go up, thus making their OWN purchase the reason their share went up. Doesn't make sense.

[Carnotaurus]

I've been seeing threads about the global "market" that the online game will be using for players to buy/sell. My question is, how is this even possible?

 

Real stocks have outstanding shares. The reason a stock rises in value is based on the demand--like everything else, valued based on what someone is willing to pay for it. If there is no limit to the amount of shares that can be purchased, then what exactly is the share price based on? If it is simply based on the amount of money being thrown at it then that means that every sale will drive the price up.

 

That means that spending 1 billion on a stock will drive it up quite a bit (assuming that's how the game functions) and a quick sale will return a profit. I get how that movement will make others jump on board based on it's slight upward trend. However, all this tells me is that there will be constant bell curves for stocks, and it will simply be a matter of getting on and watching for the bottom and top. If that is the case, money will be made VERY easily, and with no cap and no backing on the in game dollar, players will end up with limitless money. The game world will be infinitely rich. Only those that don't pay attention to their investments are prone to losing their money (but even then, they could wait for another rise, since all players are going to buy low). Keeping the same IPOs in the game also doesn't make sense, either . Bailing on a stock would be pointless, as it is bound to go back up (unlike real life where it's sometimes game over).

 

Day trading is supposed to be risky. It involves PREDICTING the market, which this game really can't recreate. It also involves a lot of fees and taxes, which is why quick buy/sells are not always possible. Even with a 20% increase, you may lose out after taxes, capital gains and broker fees.

 

I never took economics, and I don't trade in real life. Someone feel free to correct me if I'm wrong.

 

I have no idea how real life stock market work but you need to have some sort of faith. Some people put faith in the American economy, I put my faith in 2405.

[Mason27]

 

 

I have no idea how real life stock market work but you need to have some sort of faith. Some people put faith in the American economy, I put my faith in 2405.

 

The "some people" you are referring to are either capable of profiting from our collapse, or are just complete morons.

[tommyk86]

The "some people" you are referring to are either capable of profiting from our collapse, or are just complete morons.

 

 

Or the "some people" that have 401k's through their employer that earn decent annual returns which adds up to alot of money over 40 years

[Mason27]

 

The "some people" you are referring to are either capable of profiting from our collapse, or are just complete morons.

 

 

Or the "some people" that have 401k's through their employer that earn decent annual returns which adds up to alot of money over 40 years

 

They are hardly immune to a total collapse. Not all companies use outside firms and will dip into those as quickly as possibly when things go south. Even if yours uses an outside firm for protection, nothing is stopping them from going under, as well. Most of the time they are invested, just like anything else. I've heard of plenty of people who have declining 401k's. Gold is the only way to guarantee an unharmed retirement.

 

Nevertheless, yeah, you're in a much better position than most Americans -- who either don't have a job, or work for places that barely offer benefits (for now), let alone matching 401k's.

[tommyk86]

 

They are hardly immune to a total collapse. Not all companies use outside firms and will dip into those as quickly as possibly when things go south. Even if yours uses an outside firm for protection, nothing is stopping them from going under, as well. Most of the time they are invested, just like anything else. I've heard of plenty of people who have declining 401k's. Gold is the only way to guarantee an unharmed retirement.

 

Nevertheless, yeah, you're in a much better position than most Americans -- who either don't have a job, or work for places that barely offer benefits (for now), let alone matching 401k's.

 

For sure if you're invested in stocks you are always at risk of a crash or losing money. I was just making the point that over a long period of time invested in the solid investments you should come out ahead.