Tuesday, October 2, 2012

Daiblo 3: Measuring Liquidity

  • In finance we use a few basic metrics to understand a products liquidity.
    • Average Daily Volume
      • How much traded that day
    • Bid Ask Spread difference
      • The 'cost' of immediately purchasing or selling
    • Market order Depth
      • How many people are willing to buy or sell at the bid and ask
    • Volume Elasticity of Price
      • % change in price due to a % change in volume traded
      • I would love for someone to critique this metric 
        • I used to to understand low volume trading times (non-peak hours)
 
  • What are Diablo's versions of these metrics? The AH has seemed to the low end user (sub legendary / set sellers) to have completely dried up.
    • Average Daily Volume (D3) over time I bet has dropped to a relative stand still
      • Gold traded in mm
      • Lvl 60+ items
        • Rare / Leg / Set
        • Distribution of prices
    • Bid ask spread diff
      • This doesn't really exist (maybe simulated in gem / commodity market)
    • Market order Depth
      • Can be viewed as the different prices for a legendary of same caliber
        • This is probably increased on the sellers side as supply is growing 
        • Not visible information on the buyers side
    • Volume Elasticity of price
      • The other day Gold popped 20 cents (roughly 30% !!) 
        • I would imagine this was done on relatively low volume