How does the final price in GE work?

[Hammer_Time]

So I found it very strange that: I would recieve MORE than my sales price when I sell something and pay LESS than my buying price when I buy something. Does the system reach the half way for both parties?

[Scheneighnay]

If that's what you've observed, I'm curious as well.

What I figured the system was was that the lowest seller and highest buyer get first priority, but the price is negotiated to the lowest seller's price. Unless it has something to do with the second lowest price.

I was liquidating a good chunk of my bank over the weekend and wasn't able to sell saratrice eggs or maple roots even at 1gp, so those would be a good place to test it.

[Apathetic]

Credit to Finance on rs3 forums
https://secure.runescape.com/m=forum/forums?98,99,806,63785618,2,316401770#2

you can check out the whole thing here im just going to post the part you are talking about

~ How the GE Matches Buy/Sell Offers ~


For the purposes of explaining how the GE works, I'm going to use Rune 2h swords as an example. It is helpful to think of the GE as a 'stack' of buy and sell offers, all being placed at the same time. I'm going to illustrate this visually with a hypothetical example. Suppose there are 2 people buying and 2 people selling rune 2h swords:

Sell @ 40k
Sell @ 38k
Buy @ 36k
Buy @ 34k

At this point in time, nothing would happen. Why? The sellers are selling too high for their offers to get matched to anything.

Now suppose a 5th player comes along and says "Grr, I want a rune 2h sword now." He buys one for 100k.

What happens? The GE will instantly pair up the offer with the lowest sell offer available -- 38K -- so he will get his sword and 62K back. Thus, he got the best available deal at the time he placed the offer.

Note that the buyer got the cash back here. This is because he placed the most recent offer.

Ok so our 'stack' of offers now looks like this:

Sell @ 40k
Sell @ 38k <--completed
Buy @ 36k
Buy @ 34k

Now suppose someone else comes along and says "Grr, I just want to sell this rune 2h right now." He sells it for 30k. Can you guess what happens?

Yup, the GE gives him the best possible offer at the time. This means that his offer will be matched with the highest buy offer (36K) and he will get 36k cash for the sword. So now the stack is:

Sell @ 40k
Sell @ 38k <--completed
Buy @ 36k <--completed
Buy @ 34k

Again, in this case the seller got the extra cash because his offer was newer.

[Scheneighnay]

Originally posted by Apathetic:

snip

So to summarize: whichever is placed later between the buy and sell gets the more favorable deal?

[Apathetic]

One really really big thing that you may be missing is the price just not being right.

A lot of items in runescape dont have the "correct price" an example of this is you may drop an item on the ge without pressing +5%/20% or -5%/20% this means you are selling it for the market price

now lets say you do just sell it for the market price and it sells right away and gives you a profit. The reason this happened is because the GE price is wrong.

many many many many of these items exist
https://cdn.discordapp.com/attachments/320786087612121088/801168494267203634/unknown.png

For the key i got MORE than i asked for because it was worth more [BASE PRICE] than what the ge says it is
the ge thinks the key is worth 692,283 but it sold for 693,125

for the raw desert sole i would also profit "even though i lost money in my example" because again the ge thinks its worth 332 when its really worth 464


the ge is not really "wrong" its just people the majority of people are paying more for the items at this time.

but in the end you will make or lose money here because you think its worth one price when it really worth another.

[Apathetic]

on top of the price being wrong for lots of items there is also all the issues Finance talked about that can cause issues like
how many people are selling the items
how many different prices there are
if you buy lots of items the ge may pull the items from more than 1 person

[BuzzardBee]

And when items don't buy or sell at all, regardless of the price offered, it simply means there are no outstanding bids or requests for them at that time. Leave them pending and eventually they may sell or buy. No guarantees though.

[gon]

The GE price is an average of previous trades afaik.
That means its not what the item is worth, but its usually somewhere between the buying price and selling price.

With that being said, if there is none if a particular item for sale there could be buy orders with a price that is much higher "value" set by GE.
And if the market is flooded with a particular item then ppl might have sell orders far below the GE-price.

[Scheneighnay]

Originally posted by geir-o-n:

The GE price is an average of previous trades afaik.
That means its not what the item is worth, but its usually somewhere between the buying price and selling price.

Does that not mean what it's worth?
It's the value given to it by the community at the moment.

[gon]

Originally posted by Scheneighnay:

Does that not mean what it's worth?
It's the value given to it by the community at the moment.

yes and no, that depends on how quickly it follows the development. its the value given by the community over a period of time, but it could be completely irrelevant if supply/demand is influenced by something like an event.

if the average is based on a huge amount of trades then it can posssibly be influenced by sales that were done a long time ago when the circumstances were completely different.
This is the safest way to calculate an average but it means it will be inaccurate in times where certain items are in more/less demand then usual.

if the average is based on only the most recent trades, then it is wide open for manipulation.
imagine someone or a group of ppl cleaning out the market for one item, then trade between themselves at prices alot higher then they originally bought them for. The average would then be alot higher, making ppl think its worth more. Then that person or group can sell the items with a huge profit.

[Wolfie]

Originally posted by Scheneighnay:

Originally posted by geir-o-n:

The GE price is an average of previous trades afaik.
That means its not what the item is worth, but its usually somewhere between the buying price and selling price.

Does that not mean what it's worth?
It's the value given to it by the community at the moment.

GE price is the average guide sell price, an items value is separate and can be more or less than the GE price, if you check the wiki there should be high/low alc value, its original value, reclaim value and GE guide price