How will a Trader in Stock Exchange Bid on Penny Auctions

Game theory is “the mathematics of strategy”, it assumes that if all players in a game play the most rational strategy the result of the game is predictable. “Successful bidding isn’t just what you bid on, it is also the way you bid.”

Just as with a good strategy, “knowledge and information are two critical success factors in bidding for the best approach to winning, you want to build your knowledge and find quality information first. The way in which the different types of bidders utilise knowledge and information to build their bidding strategies gives rise to different types of bidding techniques and winning trends.

Bidders’ Strategies and Bidding Trends

The identification of bidding trends is essential to determining a bidder’s strategy. Penny auction bidding strategies are based on the identification of the bidding trends.

Bidding on News

Another important technique is News Playing. The basic strategy is to avoid bidding if the website you are bidding on is in the news or bid when there is no news about the site. Typical events that can cause lot of people coming on the website which inflates the cost of products are positive news reports about the website, News on Penny Auction or large advertising, marketing or PR stunt. Example Swoopo was in news when it got a large VC funding in the US. Two impact, immediate impact of news was high growth in traffic and long-term impact Swoopo will do much bigger advertisement campaigns and hence more competition.

Suggestion – Follow your auction site on Twitter, Facebook etc and setup a Google news alert for your company

Guessing the Players

The whole system is highly dynamic. Big movements in a small time are possible. The penny auction bidder has to guess the action of the major actors on the auction market. The interpretation of the signals of the big players is crucial. Most big players will enter a penny auction early in the game if they smell quick win. Understanding the actions of big players can give a good insight into how the future of that auction will pan out.

Suggestion – Keep a record on big players and possibly their winnings

Bubbles

Price of a stock is much higher than the value of a product. The Bubble comes into existence due to high speculations and is by far the most dangerous to short term speculations. It is easy to predict by comparing the price and average closing price of all the products.

A Bubble comes into being when unsophisticated/new players get pulled into an auction where they hope to make big returns. More they get into that auction more they get a feeling of being invested. An unsophisticated player doesn’t think in terms of sunk cost and doesn’t set a limit beyond which he/she will stop the bidding. Sophisticated or long-term player can still profit during these bubbles by understanding and following the unsophisticated players quite closely. Once the unsophisticated players move out the more patient players dive in for a kill.

But bubble remains the most dangerous and unpredictable auction and even sophisticated players stay out.

Suggestion – Avoid bubbles like plague

Briatore turns to online auction for next manager

QPR's playboy owner Flavio Briatore plans to bid for his next manager on an online auction site.

Flavio Briatore, QPR's gregarious owner, parted ways with his sixth manager in two-and-a-half years this week with Paul Hart the latest coach to join the dole queue. The playboy Italian, who recently overturned a lifetime ban from the Formula 1 authorities, will now scour online auction sites in search of a replacement.

A source close to the former Renault F1 boss said he had commandeered the QPR youth team, who are now manning PCs in the basement of his mansion, monitoring online auction sites and waiting for someone with top level coaching experience to be auctioned off.

Briatore has heard that online auctions are offering all kinds of top prizes these days from DVD players to dates with underwear models and he is confident that it will only be a matter of time before bids open on the right candidate.

One lucky punter on the online auction site MadBid picked up a brand new Mini for £6.83 recently, which has convinced Briatore that he can avoid expensive compensation payments and agent fees by putting his steely nerve to the test against the online auction community.

The next time an out-of-work football manager is up for grabs, Briatore plans to get bidding. He is confident that he has the staying power, the patience and the bravado it takes to win even the most competitive online auction.

There's no sign of QPR's next manager among the live auctions currently running on MadBid. However, if Briatore fancies flexing his bidding muscles he could land himself a Phillips Wake Up Light, a Nintendo Wii or a Samsung 46" Ultra Slim TV for up to 90 per cent off their retail value. Briatore isn't short a bob or two, but you don't get rich by spending all your money so some of these treats might just tempt him and will provide some useful bidding practice.