How the GE Works

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How the GE Works

Post by [ADMIN] Billious on 17/12/2013, 1:09 pm



How the GE Works


The first thing the GE does when trading on it is it tries to find the best possible offer. So if your buying it will find you the lowest sale and when selling it will find you the highest buy offer.

Secondly it uses a queue system where if there are a number of offers for the same price the oldest one gets filled first. Now if it is partly filled in a transaction it then drops to the bottom of the list and the next oldest offer becomes the next to get filled.

Thirdly, the market price of an item is determined by the Law of Supply and Demand. This means that if an item is in demand and the supply is low the price rises. The opposite would be that the item is not in demand, but the supply keeps coming into the market. This makes the overall price of the item decrease. A third situation would be the equilibrium price, meaning that the supply and demand are both at the same level making the item's price stay the same.

When we do a PC and buy over the GE price we instantly get the lowest and oldest offer that is waiting on the GE, that is equal to or less than the buying price we offered. They don't get our price as their offer was in longer.

Likewise when selling an item below the GE price we instantly get the highest price which is the oldest offer at that price. Again because the buy offer was older than our sell offer we get their buying price.

An example of this that has happened to me is when I had a buy offer in overnight that partially filled. I left that offer in and did a standard PC to see if prices needed to be changed. I bought one at the high price and tried to sell it below my buy price. Now instead of selling it to myself I actually got a price that was higher than my overnight buy price.

So in the guide "Smokin Mils Flipping Guide: 7 Easy Steps to Profit" we told you to often add a few gp to the PCed buy price or take a few off the sell price to speed things up. This is why it works. Your offers then get preference over the PC'ed offers and therefore fill first since the GE tries to give the next person the best deal, before it looks to the queue system. This also explains why undercutting works.

With more and more people getting into merching, being undercut when selling (or overcut when buying) is happening more often. This is when another player tests prices and gets your price. They then raise the buy and lower the sell, shrinking the margin. This means that their offer will be filled before yours.

So when your offer stops filling you can do one of 3 things. Wait for their offer to fill, making yours the next in line to complete. This is often the preferred thing to do as you keep the margin and and don't start an undercutting war that will inevitably shrink margins to the point that the flip wasn't worth doing in the first place.

However some items are that slow, increasing the chance that prices will change before their offer fills. With items like this you can either simply adjust your prices slightly OR thirdly retest the prices to get a more accurate idea of how much you need to change prices by. If you are on your limit then you either have to just guess or perhaps you can ask someone else to pc the item for you.

So the GE will always give the best and oldest (at that price) offer over newer ones at the same price, unless the oldest offer has been partly filled. In which case we get the next oldest offer.

Another thing to note is that one half of the transaction will always be instant. For any offer to fill the opposite offer has to be waiting to be filled. So to buy an item instantly there must be a selling offer waiting to be filled and likewise an instant sale needs a buy offer waiting on the GE.

This means that an instant sale is the same transaction as a non-instant buy and vise versa. Being an instant sale/non-instant buy makes it the low price, just like in a PC, which also means an instant buy/non-instant sale is the high price of the price range. It is important to know as all the price checking friends chats use this to some extent when making their prices, which we will go into more detail in other guides.


All About GE Limits

What are GE Limits?
GE limits are a set limit of how many of an item you can buy on the GE in a 4 hour period. There is no limit to how many you can sell.


Why are there limits?
The main reason they were created was to stop one rich player from buying all the available stock on the GE and then dictating an unreasonable price. For instance, someone could buy all the battlestaves, which are used in crafting, and then charge 100,000gp each for them. Due to limited supply of these into the game, people would be forced to pay this.

Another reason for limits is to give players the opportunity to buy only what they need. This is why the new 1 limit items have been introduced, to increase the rarity of these items and to stop merchants from pushing prices too high.



How are GE limits important to merchants?
Limits are important in all forms of merchanting. They dictate the amounts tradable and therefore the possible profits that can be made. Also, the lower the limit, the more likely it is to have to use a less accurate method of finding your buy/sell prices. When looking at margins, you have to be aware of the limits as they effect the possible outcome of the flip, determining if it's worth doing.

Example: I won't include price checks here to make it easier to explain/see the difference. Is a 1k margin worth doing?


  • 1k margin = 10k for Staff of light, limit of 10/4hrs
  • 1k margin = 100k for Berserker helms, limit 100/4hrs
  • 1k margin = 500k for Diamonds, limit 500/4hrs
  • 1k margin = 1m for Dust of Armadyl, 1k/4hrs
  • 1k margin = 5m for Royal d'hide chaps, 5k/4hrs (very slow flip)


So as you can see when you test prices of items you need to know their limits to work out whether the flip is worth doing. With inactive/overnight and investment, you can buy a number of limits over time, but they still restrict whether the outcome is worth the effort.



Limit Groups
We tend to talk about items having one of 3 different limit groups as each one is flipped differently.

Bulk Items as the name suggests, these can be bought in very high quantities in a 4 hour period and are accepted as having a 1k+ limit. With items of this type, you can often use the exact prices from your price check or come in from the high/low by as little as 1gp. Coming in any more than that often creates a cutting war which totally kills the margin and makes the flip not worth doing. Many merchants flip these items, but due to the large numbers that can be bought they only need a small margin to be worth the effort.

Medium Limit Items have a limit of 5 to 500 and can be flipped in a similar way to bulk items by finding the prices with a standard pc (price check). More often than not though, you will come in much more than 1gp from the high/low price as the margins are larger, meaning you can generally afford to adjust your prices as necessary.

Low Limit Items on the other hand have a limit of 1 or 2 and therefore can't be price checked in the usual manner. Due to this, one of a number of other techniques needs to be used when flipping them. The fact that you can only get 1 or 2 in any 4 hour period does usually mean they have the highest margins of all items. Techniques for flipping these can be found on a number of other guides within this section.



Are there any ways around the GE limits?
The only way left to be able to buy more than these limits is to buy from another player. Player to player trades have no restrictions. By asking friends or randoms at the GE to buy limits for you, you can increase profits on items. You can no longer reset or increase the GE limits by selling more back through the GE.


Additional Information
Be aware that certain items have their limits linked. This means that you can only buy the single limit for a group of items. A good example of this are the godswords. If you buy 4 Bandos godsword and 3 Zamorak godswords, then you can only buy 3 more godswords of any type or godsword part within the 4 hour limit. Barrows items are also linked within their sets. For example: 6 Ahrims robe tops and 4 Ahrims robe bottoms = your limit of Ahrims pieces/sets. You would still be able to buy Dharoks pieces/sets, as they are in their own linked group. A guide for all the known linked items can be found here:

http://www.smokinelite.com/t78172-known-linked-limits


The largest and most up to date list of limits I have found was done by Eridex (Cook Me Plox). Which can be found here:

http://runescape.wikia.com/wiki/Grand_Exchange/Buying_limits


Wealth Differences
Footnote:
Historically, limits were very closely tied in with wealth differences. Many players have different cash stacks and each would say that high and low wealth flips are completely different numbers. As a way to standardize wealth differences, a focus on the limits of items was used to make the numbers more universal. As the game evolved over the years, however, these explanations had way too many exceptions. The numbers can still be used even though the reasoning is not the most valid anymore.

High wealth items like rares generally have a limit of 2 per 4 hours. Rares have always been considered high wealth flips, so we use them as a guide to what a high wealth flip is. The cheapest rare is the easter egg, which used to be priced around 50m and that is why we say high wealth flips are 50m+.

Medium wealth items therefore have medium limits like weapons and armours. These items can have limits of 5 up to 500. The majority of these items could have a full limit bought for under 50m in the past. There were a few exceptions, but since rares started at 50m, these items were technically considered as medium wealth flips.

Low wealth flips are typically items with very high limits like runes and ores. This is where a small margin can make a nice profit due to the bulk number that can be purchased. Nearly every high limit item can have a full 4 hour limit bought for under 20m which is why that number was used.

So, while these numbers can be subjective (defined by the individual), we use the category of limits to standardize this:

High = 50m+, generally limits of 2
Medium = 20m to 50m, limits of 10-500
Low = Under 20m, limits of 1k+



Special Thanks to the flipping mentor team who helped make this guide Cille, Gonecase, Kelly, Killerhart and Minato.


Last edited by Billious on 6/5/2014, 4:15 am; edited 1 time in total

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Re: How the GE Works

Post by Lemonns on 19/12/2013, 3:32 am

Very interesting, thank you for posting this thread!

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