Yesterday we started with this chart.
Showing the peaks and troughs in PLEX pricing and how it affects profitability in the various ways to extract skill points.
Today the same chart but we are going to look at volatility.
"In finance, volatility (symbol σ) is the degree of variation of a trading price
series over time as measured by the standard deviation of logarithmic returns."
In simple terms if the price moves a lot it has high volatility. If you think in stock market terms it doesn't just mean "ah sell, sell, sell the market is crashing down". Something can have high volatility if it moves up as well. It is how fast it moves up or down or how far from the past price.
In the green box we can see that the variation is high. In the space of six months the full account (yellow) went from +2b -> 0b -> +1.8b of profits. This was a full account using all slots to extract skill points "SP farming".
This period was full of PLEX sales. The system as explained yesterday was at the whim of the "average player". Not super tight on margins. Using specific buy and sell orders to get the maximum profits. But during this time you also had players with huge SP farms.
How I made my first trillion ISK
Posts like these were cropping up all through 2017/2018. I think this is what made the moves so large. The plex sales would take place and the huge farms would need to move sell or extract a lot! Yes they would use sell and buy orders to maximise margins (unlike "average player") but the initial purchase could only be done in the window of the PLEX sale. This led to higher highs and lower lows. Volatility.
That all ended when we had this, as shown yesterday.
The "average player" could no longer PLEX their main character by extracting SP from the other two slots. You can see that we had another bump up in profitability in December. PLEX sales again over Christmas. Which lead to CCP Hilmar saying:
"We overdid it last year when it came to PLEX promotions.
We are going to slow the ■■■■ down for now."
-- CCP CEO Hilmar Veigar Pétursson, 28 March 2019
That was preceded by volatility of another kind. Kinetic volatility.
This was the start of shenanigans failed Keepstar anchoring shooting pew pew pew. During all of this markets were put up shot taken down. Chaos. Markets don't like chaos. During this time existing PLEX, extractor, injector and MPTC sell/buy orders would have been taken down. Some gone into asset safety etc as the fighting ensued.
Once that was all done and dusted? Tranquility. We have the red box
As was shown yesterday profits from SP farming were near zero. Profits remain however in charging a small % fee for the huge amount of inputs and again a small % fee for selling the outputs of SP farming.
With profitability of the main activity so low all these components are just being sold between each other. Which leads to speculation.