How to Make 1 Million NP Speculating in Codestones

by sam_mikes

This is a how-to article. It explains how to make lots of money quickly. Even if you have just 1 NP to start, you can use the method I'm going to describe to make over a million NP -- but it's easier if you start with more than that!

Go to the Shop Wizard and search for "codestone". You should see lots of codestones in the range of 5500-7000. Some kinds of codestones will cost more than others. Refresh the screen (usually you can do this by pressing F5). The Shop Wizard will search again. Keep doing this for a while. You will get a feel for about how much codestones are selling for (the market price).

After a while, you will start to see that some people sell codestones for low prices. For example, if the usual price is around 5700 NP, you might see codestones for 5000, 4000, or even less -- sometimes as low as 1 NP. There will not be many of these, but you will see them.

Now you need to make an important decision -- you need to choose a limit price. From now on, if you see a codestone below this price, you will try to buy it. A low limit price (for example, 3000 NP) is safer than a high limit price (5000 NP). You will make more deals with a high limit price, but there will be a bigger risk. I suggest you start with a limit price at least 500 NP lower than the current market price -- that means 5000 NP or lower.

Go back to the Shop Wizard and start searching, but keep your limit price in mind. When you see a codestone listed below your limit price, go to that shop. Find the codestone and buy it. If the shop has other codestones for below your limit price, buy those too. Keep buying codestones until they're gone or the owner raises the price. Then go back to the wizard and start searching again.

When you have a few codestones, put them in your shop. Price them somewhere between your limit price and the market price. For example, if your limit price is 5000 and most codestones sell for at least 5500, you might sell them for 5200 or 5300. Sometimes you will want to raise the price on certain expensive kinds of codestones -- usually Main codestones. That's okay. Make sure that you price them at least 100 NP lower than most other people. You want to sell them fast, so you are willing to get a little less than normal.

After a while, your shop will be cleaned out. While you're waiting, shop for more cheap codestones. Take the money out of your shop till and use it to buy more cheap codestones. After a while you'll have tens of thousands of NP. Deposit them in the bank when you're not using them. Anytime you need more money, go back to the Shop Wizard and buy cheap codestones. Remember to buy low and sell high.

WHY THIS WORKS

Since all codestones of one type are basically the same, and there isn't a big difference between the types, the market quickly establishes a fair going price for codestones. (Technically, the market in codestones is a commodity market and exhibits perfect competition.) People who don't pay attention to the market price sell their codestones for whatever number pops into their head, or the Neopets base value (500 NP). Usually this is far below the market price. If you are fast, you can buy these bargains and sell them around the market price.

Frequently Asked Questions

Q. Who's selling these codestones?

A. All sorts of people, but basically: uninformed sellers.

Q. I bought a codestone for 570 NP and now the seller is Neomailing me and asking for it back! What should I do?

A. It's up to you -- you don't have to give it back. Sometimes people make a mistake -- leave off the last "0" or price a codestone for 10 NP because they were looking at the Orange Fuzzle right below it. Usually I Neomail with these people to find out what happened. Sometimes I give them their codestone back; sometimes we arrange a deal or a trade.

Q. Who's buying my codestones?

A. Specialists -- people who make it their business to hold lots of codestones and track small movements in the price. They keep track of where the current market price is and buy codestones priced below it, sell them for market, and make money from the difference.

Q. Why shouldn't I sell for the market price? Why do you recommend selling 100 to 200 NP below market price?

A. It can be risky to hold on to a commodity. If the supply or demand situation changes suddenly, the codestone price could plummet, and you'd be left under water -- holding codestones that you purchased for more than they're currently worth. By selling for 100 to 200 NP below the going rate, you guarantee a quick turnaround. Think of the markdown as an insurance premium that you're paying to the specialist -- who assumes the risk of a market crash.

Q. Why should I set my limit price low, say at 3000 NP, instead of cutting just under market at 5000 NP or even 5500 NP? At 5500 NP I can still make money on every trade!

A. Because each transaction that you make takes time, and you only have a limited amount of capital (this is especially true when starting out), I recommend going only for very good transactions. If you make 20 transactions from 5500 to 5700, and I make 1 transaction from 100 to 5700, I've made 5600 NP and you've only made 4000. While you were busy buying, stocking, and pricing, I probably got to do twice as many searches, increasing my chances of finding a good deal.

Author blurb: sam_mikes is a part-time codestone speculator and founder of the Codestone Speculators guild.