Grand Exchange



The Grand Exchange (GE) is a trading system for everyone to buy and sell from each other almost every tradeable item (currently 7,037 items). Members get six (6) spaces in which they may trade items, but free players are only permitted two (2). Traders don't need to advertise, meet each other, or even wait at the GE for their trades to finish. All coins and items from fully and partly finished trades are collectable at any bank, but not at bank chests (except the one in the clan wars lobby) or deposit boxes. This trading system resembles a real-life computerized commodity market where all transfers are done by computer, and there is no need to pay for brokerage. It is extremely efficient. You are immediately informed with a chatbox notification and sound clip when an offer goes through.

The GE also refers to the location of this trading system, which is an official marketplace northwest of Varrock city. It was released on 26 November 2007 and has since replaced the older marketplaces in Varrock and Falador cities. It is a popular place and usually crowded.

Finding the Grand Exchange


The Grand Exchange is located northwest of Varrock. There are many ways to get there, including:


 * Walking from Varrock (with or without use of the Varrock Teleport spell).
 * Teleporting to the air altar using the air altar teleport then walking to it.
 * Using the tunnel northwest of the GE. (Requires membership and level 21 agility.)
 * Using a Canoe Station (requires 12 woodcutting) to travel to either the Champion's Guild station or Barbarian Village station or Edgeville station and walking north, east or using the Tunnel as said above.
 * Using the Mine cart northwest of the GE. (Requires membership and having started the quest The Giant Dwarf.)
 * Using the Spirit tree northeast of the GE. (Requires membership and having completed the quest Tree Gnome Village.)
 * Using the Fairy ring with the code "DKR." (Requires membership and having access to the fairy rings from the quest Fairy Tale Part II.)
 * Using the spell Varrock Teleport, or a Varrock Teleport tablet after changing its destination to south of the GE. (Requires membership and having completed one set of Varrock Tasks.)
 * Using a charged Ring of Wealth's teleport.

NPC Informants


Around the GE are five characters who shows the current prices of various items.


 * Farid Morrisane shows the prices of ores.
 * Relobo Blinyo shows the prices of logs.
 * Bob Barter shows the prices of herbs. He also decants potions into full and empty vials. He can decant potions even if they are noted.
 * Murky Matt shows the prices of runes. He also "decants" charged items into full and empty charges.
 * Hofuthand shows the prices of certain weapons and armours. (See picture for details.)

Item sets
Most armours and the Dwarf multicannon can be assembled into sets to save space. They behave like ordinary items except they are unusable until they are disassembled. Only the GE clerks can assemble and disassemble sets, and they will do it for free. Right-clicking a set and selecting destroy will not disassemble it.

Pricing
Prices are partly governed by the Laws of Supply and Demand:


 * If an item is in high demand with low supply, then its price will increase.
 * If an item is in low demand with high supply, then its price will decrease.
 * If an item's demand matches its supply, then its price will stay the same.

Jagex has never published the GE's exact pricing algorithms, although we do have some reasonable guesses. By using the laws of supply and demand, the prices of items are updated depending on its recently traded prices and volume. For items with low volume such as partyhats, their prices update every few days or even once a week. Jagex can also intervene and set the prices themselves, and they reserve the right to intervene when they believe price manipulation is going on.

Because of an update on February 1st, 2011, there are no longer trade restrictions but there are guide prices and buttons to increase or decrease your offer on the item by 5%.

Trading Tips

 * For the Runescape Wiki price guide, see GE Price Guide.


 * World 1 and 2 are popular worlds for trading items without using the GE, especially items such as partyhats.
 * Competing offers are prioritized chronologically, so consider making your offers early.
 * All offers are completed using the earlier offer's price. In other words, when the buyer's price is above the seller's price, the trade is completed using the earlier offer's price, so also consider making your offers later.


 * To bargain, you can wait to see whether your offer is accepted and then change your price accordingly.


 * To wait efficiently, you can make fires, cook, alchemise, superheat, chat with friends or surf forums while waiting.
 * When a new account sells its first item on the GE, the item is instantly converted to coins. This doesn't apply if the selling price is outside of the +/- 5% range.
 * Price manipulation is possible even with the GE, so be careful. (See section Price Manipulation below for details.)
 * On multiple Trading Worlds, such as World 1 for F2P and World 2 and 6 for P2P, sections of the Exchange are often dedicated towards one particular bartering. The North is generally considered the "lending area" for rare and expensive items. Towards the West is the rare item trading area, for items like party hats and other expensive items. The South of the GE is infamously flooded with gambling; taking advantage of the large amounts of money players carry in the Exchange, "Flower Gamers" set up shop here to try to catch a passing player. Other games include the Dice Game. These are most popular in worlds 1, 2, and 6.


 * Changing the buying offer of a product by + %5 usually has an instant buy, the same is true while selling an item at -%5 the usual price.

Trade Restrictions
All trade restrictions are intended to reduce price manipulation, real-world trading, and/or unfair interactions between players with different levels. On the issue of price manipulation, Jagex said, "We are keen to keep a player-driven economy, so the prices are worked out using the supply and demand rules above. We will only intervene as a last resort, and only if we think price manipulation is going on, although the system has lots of safeguards to prevent that." Trade restrictions are those safeguards. On February 1st all price (but not necessarily trade) restrictions were removed. (edit: Many of the below restrictions changed on February 1st and have not been updated)

Buying and selling rates

 * 1) Buying rate is restricted to a certain quantity every 4 hours. The exact quantity for each item is shown below:

1 Potions have 3 different buy limits. (4) dose limit is 500, (3) dose is 1,000 and Saradomin Brew (all doses) are 1,000 due to a hidden update.

2 Items in the same set share the same restriction, i.e. maximum of 51 bronze platebodies and 49 bronze platelegs every 4 hours. This includes treasure trail sets.

3 Slayer items including abyssal whip, amulets of ranging, black masks, brine sabres, draconic visages, dark bow, focus sight, granite items, hexcrests, staves of light and metal boots.

Prior to the Wilderness and Free Trade Update, there was a four hour cooling off period before one can sell an item they have recently bought. The fact that players can sell any number of the same item at the same time remains unchanged.

Tradeable items that cannot be traded using the GE
Some items cannot be traded using the GE, but they can still be traded using the traditional player-to-player trade. The list includes:


 * Burnt foods.
 * Items from the quest Shield of Arrav: half certificate, phoenix crossbow, and weapon store key.
 * Items from the quest Heroes' Quest: miscellaneous key and Pete's Candlestick.
 * Most items from the shopkeeper Faruq in Al-Kharid: magic skullballs, marker seeds, and voting hat. [This list is incomplete.]
 * Ogleroot from the activity Vinesweeper.
 * Cursed magic logs from the Spirit Realm.
 * Ancient artefacts (Revenant drops) from the former PvP Worlds and Bounty Worlds.
 * Partially charged items: amulet of glory (1-3), games necklace and ring of duelling (2-7), pharaoh's sceptres (1-2) and black masks (1-9). Remember that Murky Matt can transfer charges around to make full and empty charged items.
 * Gnomeballs
 * Afros obtained from Party Pete.
 * Weeds obtained from farming. (As of 19 July 2010)
 * Coins
 * Double eyepatch

Absolute prices: ceilings & floors (historical)
Some items had a maximum and minimum permissible price. The maximum permissible price is called a ceiling, and the minimum permissible price is called a floor. Spirit shard has a fixed price, which means it has an identical ceiling and floor.

This trade restriction was intended to reduce price manipulation and unfair interactions between players with different levels. Some examples:.


 * Economic cooperation often favours players with lower levels, at least more so than Jagex intended. As an example, wine-making is a very fast way to gain cooking experience, and so some high-level players used to pay 100 coins for each jug of water. This means low-level players could fill the empty jugs and sell them for at most 246,000 coins per hour. After one hour at the water pump a newbie could have easily bought full rune armour. Ceilings and floors reduce this sort of unfair cooperation.
 * Economic competition often favours players with higher levels. And so items used by various levels often have prices beyond the lower level players' budget. As an example, a level 9 mage needs about 102 coins to cast one earth strike, which is often too expensive for them. Ceilings and floors reduce this sort of unbalanced competition.
 * Popular alchemiseable items often have floors slightly above the coins generated by high alchemy, which discourages easy magic levelling.

Sadly, the ceilings undervalue some items and the floors overvalue some items. (Overvalued items are also called junk items.) To balance their street values, they must be traded for each other using the slow player-to-player trades.

Jagex has never published a list of items displaying their ceilings and floors, although Jagex has a stickied thread on its forum for everyone to offer suggestions about new ceilings and floors for specific items. 

On February 1st, after the Wilderness and Free Trade Update, ceilings & floors were removed and replaced by custom prices.

Relative prices (Historical)
Jagex uses a restriction on the permissible price range to slow the volatility of the market and to prevent real world trading. It means the market responds slower to large changes in price.


 * 1) All items' prices are restricted to ±5% of their current market price. If an item's market price is 100, then its price range is between 95 and 105. All offers outside the ±5% range are inactive, so check your offers occasionally and update them as needed.
 * 2) If a ceiling or floor is within the ±5% range, then the ceiling or floor has priority.

With the Feb. 1st 2011 update, there is no longer a ceiling or floor for most items. Free trade has enabled an open market again.

The GE replaces some merchants
The GE has made some merchants almost obsolete. The list below outlines some roles of merchants, and then shows that the GE has fulfilled these roles almost perfectly—far better than every human merchant. This, of course, is based on an assumption that GE prices all goods correctly, which can be very unrealistic. All the junk trading that had been happening prior to the lift of trade restrictions is a very clear evidence against this assumption.
 * 1) Decrease the overall transaction cost.
 * 2) Transaction cost is the cost of finding someone to trade with, bargaining and enforcing a trade agreement, and transferring the agreed goods and/or services.
 * 3) The GE finds someone to trade for us. It searches every offer, always and every world.
 * 4) The GE bargains for us. If the buyer bids higher or equal to the seller’s asking price, then the GE instantly completes the trade. If not, then it doesn’t—but in this case merchants cannot profit anyway. Because if the buyer bids lower than the seller’s asking price, then merchants cannot profit by buying from the seller at some price and later selling to the buyer at a lower price. Also, we can bargain using the GE by waiting to see whether an offer is accepted and then changing our price accordingly. While waiting to see whether an offer is accepted, we can make fires, cook, alchemise, or superheat to pass time. It means only a tiny amount of time is used purely for bargaining.
 * 5) The GE enforces trade agreements for us. It guarantees that each person keeps his or her end of the bargain.
 * 6) The GE transfers the items halfway for us. We still have to bring the items to the marketplace, but the GE brings the items from the marketplace to our collection box. We can collect them at any bank, and all we had to do was teleport to Varrock and run to the GE once.
 * 7) In summary of 1 through 6, the GE has made some merchants almost obsolete.

Price manipulation
Every price manipulation uses deception and/or coercion, which is why it is wrong to intentionally manipulate prices. Price manipulation is generally considered to have two main types and several subtypes; they are categorized differently because they work somewhat differently. (The fact that they work somewhat differently is why more than one solution is needed.) The two main types are disclosure-based manipulation and trade-based manipulation.

Disclosure-based manipulation
"This occurs where a person [discloses] false or misleading information which has the effect of misleading other participants about the value or trading volume of a security." (Every tradeable item in RuneScape is a security.) Disclosure-based manipulation is fraud.

Pyramid scam
How some merchant clan leaders are using a pyramid scam on people, in five steps:
 * 1) Some merchant clan leaders secretly buy lots and lots of the same item.
 * 2) They recruit and mislead people into buying the same item at a higher price, thus raising the item's price.
 * 3) They encourage people to recruit even more people, thus creating a pyramid.
 * 4) They set a "dump price" for everyone to sell.
 * 5) They either secretly sell their item before this dump price is reached, or they suddenly announce a new dump price; in both cases many people are still buying the item. What these people are misled into buying is the item they are secretly or suddenly dumping.


 * Steps 2 through 5 overlap considerably.
 * The clan owner will make millions this way, Some clan leaders do this with their ranks. They'll set the price of a 1k item, to be dumped at 10k. They themselves will buy the item for 1k -1.2k each, wait till 5k, and they'll sell them. If the clan is big, this wont affect their merchant, or they can blame another clan and start needless 'wars'.

Trade-based manipulation
"This is the buying or selling of a security by a person [or group] which misleads or deceives other participants about the value or trading volume of that security.” It has many subtypes, but only two significantly damage the Runescape economy: matched orders and corners.

Matched orders, pools, and wash sales
Someone places an order to buy, and matches it with an order to sell: the buyer and seller are the same person. This transaction is fake because nothing is really being transferred. Matched orders manipulate prices by faking a supply and demand. A group can do this too.

Matched orders also mislead other people into overestimating the trading activities of the security that’s being manipulated, and thus—for slightly technical reasons—mislead them into underestimating the transaction cost of that security.

Matched orders and genuine orders are currently nearly impossible to differentiate on runescape. We can only imagine account#1 posting an order to buy a dragon pickaxe for an unusual price, and account#2 selling it for a similarly unusual price. Repeated enough times and the price isn’t so unusual anymore, and that’s when the manipulation succeeded. We can also only imagine 2 million lobsters being bought and sold for the same price on the GE, and so the GE accounts for those numbers when it updates the price of lobsters, but the GE currently doesn’t know whether the buyers and sellers were the same person. We don’t either. Again, matched orders and genuine orders are currently nearly impossible to differentiate on Runescape.

Corners or squeezes
Someone buys something, raises its price, and then sells it to another person. In this transaction, a cornering merchant intends to raise price by merely monopolizing his or her competitors, whereas a genuine merchant intends to raise price by at least decreasing the overall transaction cost. (Transaction cost is the cost of conducting a trade: the time and effort of finding someone to trade with, bargaining and enforcing a trade agreement, and transferring the goods and/or services.) Corners manipulate prices by monopolizing a security in a way that increases its overall transaction cost, and this additional transaction cost burdens other buyers but not the manipulator. Again, a group can do this too.

The New Zealand government defines corner this way: A corner is where “a person [or group] buys up a substantial volume of a security knowing that other market participants will be forced to buy from him at a higher price.”. Other buyers are forced to buy from a cornering merchant because they are left with few alternatives—the manipulator had already monopolized his competitors. By contrast, other buyers are not forced to buy from a genuine merchant because of two reasons: first, a genuine merchant often has competitors or the threat of potential competitors; second and most importantly, a genuine merchant saves them some trouble of finding someone to trade with, bargaining and enforcing a trade agreement, and transferring the goods and/or services.

Implementing the GE
The GE was released on 26 November 2007. Before the GE, Jagex had several legal issues with "real-world trading organisations." These organisations use bots and/or RWT labor to harvest raw materials, and then either sell the raw materials to NPC shops or amass them in a "farm system." Their virtual wealth is then traded to players for real-world money. These organisations operated on both free and member worlds, and Jagex claims that their member accounts were often using stolen credit cards. The payments from stolen credit cards sometimes had to be refunded, in which case Jagex loses money.

The GE was implemented alongside with a restriction on player-to-player trades which restricted net wealth transfers to 3,000 coins. The restriction was intended to weaken real-world traders and every type of price manipulation, but it also harmed genuine merchants and other honest players. Players complained and so Jagex to gradually relaxed the restriction to 5,000 for zero quest points, 10,000 maximum for free players, and 60,000 maximum for members. On 1 February 2010, the trade limit was updated. Friends with each other's names on the friends list for over 1 month will have their trade limit doubled when trading with each other, tripled if over 2 months, and quadrupled if over 3 months.

The GE was also implemented alongside a staking limit in order to stop real world trading via staking.

Another major mark the trade limit left on Runescape players is the result of limited drop trading. Drop trading was a method in which one character would drop say 500k and then log out. They would then go on another account in which they would wait a couple seconds and the money would appear. This was very risky but many players benefited from it. With the trade limit in effect, if a player dropped 500k then waited for it on another account to appear on the ground, It would never appear.

An update on February 1st changed all of this by bringing free trade back, but the GE still remains as a helpful place to find a buyer/seller for an item without having to look through the forums.

Initial economic effects
Genuine merchant activities were previously some of the most profitable methods of earning coins, but the GE has made genuine merchants almost obsolete. This means all items' transaction costs had greatly decreased, and in turn, most items' prices had decreased: Rune equipments' prices dropped significantly after a few months. Items traded on both free and members worlds were averaged by the GE. For example, cooked lobsters were traded for 250 coins in free worlds but 200 coins in member worlds, and so the GE price was 220. Discontinued items, especially partyhats and Christmas cracker, were primarily used in staking and so their prices dropped significantly after the removal of staking. A few items' prices, however, increased after the GE's release. For example, bones were previously not worth the effort to collect and trade, but then their prices quickly increased to about 100 coins.
 * Cooked Shark: 800 to 1700 coins (but later fell to below 1000 when Living Rock Caverns and Rocktail fish were added to the game).
 * Cooked lobster: 250 to 80 coins.
 * Rune battleaxe: 50,000 to 25,000 coins.
 * Rune scimitar: 25,000 to 35,000 coins (but later decreased to 20,000 when PKing was re-added into the game).
 * Rune platebody: 55,000 to 71,000 coins (but later decreased to 45,000 when PKing was re-added into the game).
 * Dragon hatchet: 2.7 million to 2.0 million coins (But later decreased to 1.3 million coins).
 * Abyssal whip 1.5 million to 3.3 million coins (But later decreased to 1.1 million coins - 31 March 2011).

On 10 December 2007, a series of updates eliminated macros, which were a major source of raw materials. As a result, prices for raw materials previously gathered by macros, such as yew logs and raw lobsters, increased to a higher level than their pre-GE level. Yew logs increased from about 350 coins during pre-GE days to about 450 coins post-GE. Raw fishes are now worth more than cooked ones, except for manta rays and sea turtles because they can still burn even with maximum cooking level. The prices of raw and cooked fishes are now generally similar to their prices several years ago when macros were not a major problem.

Players' Initial Reactions
Most players embraced the release of the GE because it greatly reduced their transaction costs (see above section "GE replacing genuine merchants"). Some players, however, criticized the trade restrictions, especially the ±5% trade restriction and the player-to-player trade restriction. Other players criticized Jagex's lack of transparency because Jagex has neither published the GE's pricing algorithms nor the price ceiling and floor of each item.

Some players view the GE as a form of totalitarianism, a political system in which a central authority controls the economy and culture. This claim is largely without fact however, as most of Jagex's actions mirror that of Keynesianism, in the use of government intervention to decrease inflation or recession. The economy is driven by players, but many times Jagex has intervened by raising the prices of items that were significantly below their high alchemy prices, and by correlating the prices of similar items despite the fact almost all players priced them differently. For example, empty jug and jug of water have identical prices, and full potions and partial potions have proportionate prices. Jagex's interventions have discouraged players from using high alchemy to effortlessly train magic, and since high alchemy was a major source of coins, the lack of coins from high alchemy contributed to a deflation called the 2008 Market Dip.

The 2008 Market Dip
In August 2008, the prices of numerous expensive items—godswords, barrows armours, abyssal whip, and high-level treasure trails armours—began to decrease for various reasons. This led to a collective social problem. The players, as individuals, reacted rationally by selling those items to prevent further personal losses, which collectively caused those items' prices to drop further and thus worsening the deflation. By 4 September, prices reached rock bottom for most items and even started to rise for some items. By 31 October the market dip was over, although some expensive items were still millions of coins below their prices in August.

2010/2011 Market Dip
In the late 2010 and early 2011, players saw an unprecedented drop in the price of a number of items. Although the exact cause is unclear, many players point to the increased activity of price manipulation clans as well as speculation and uncertainty leading up to the reintroduction of free trade. The prices of a large number of items dropped by a significant margin, in some cases by as much as 50 percent. Prices continue to be highly unstable following the release of free trade on 1 February 2011.

April 11, 2011 Malufunction
In an April 11, 2011 update, the exchange was hit by a malfunction that slowed trade too a stand still. The malfunction gave “...submitting” loaders in excess of five minutes for some trades and prevented certain trades from taking place altogether.

Trivia

 * It appears that after the announcement that free Trade and the old Wilderness would be returning on 1 February 2011, offers seem to be harder to complete. This could be because players are cancelling their offers and withdrawing their items from the Grand Exchange to "merchant" them.
 * Based on the text above, it is also because Grand Exchange does not have minimum or maximum price.
 * On Thanksgiving of 2010 the Grand Exchange database had a bug. This bug showed items graphics not displayed correctly.Ge glitch.png
 * When the Grand Exchange was made public, many players were angry that the prices were set unfairly, since the "old style" of selling valuable items required much more time and effort.
 * The maximum offer is 2,147,483,647 coins or simply 231−1 coins. This is the maximum value of the Java  type in 32 bits. If this happens the price will simply say "Too high!".
 * 26 Nov '07 - release date of the GE. Various NPCs across RuneScape were talking like the GE clerks. Withdrawing offers and items in the collection box was impossible because the items were stored on an older system which wasn't synchronizing with the GE's system. Many items had market prices enormously lower than their street prices, i.e. pirate's hat at 127 coins and gnome scarf at 1,284 coins.
 * Standing adjacent to the GE desk and using a bowstring with an already strung Yew longbow used to create a message in your chat box: "You can't light a fire here."
 * 1 July '08. The HD graphical update prevented the progress bar of some players' trade offer from changing colour whenever the offer was completed or cancelled. This was fixed after the RuneTek 5 engine update.
 * 11 Nov '08. Release date of Stealing Creation. The sacred clay arrows were listed on the GE even though they cannot exist outside the activity.
 * 9 June '09. A bug muted the GE bankers and clerks, but players could still access the GE through the desk.
 * 26 Aug '09. Items are now collectible as notes: simply right-click them while they're in the collection box.
 * 17 Sept '09. Two bankers and two clerks were "fired" by Mod Alan because the multiple bankers and clerks created redundant right-click options.
 * 8 Nov '09. A bug in World 2 caused the GE bankers and clerks to vanish for several minutes.Grand Exchange Seren.png.]]
 * 10 Nov '09. The desk now only has the examine option.
 * All clerks' desks have the symbol of Seren the elven goddess. It is worth examining. It says 'used to herd clerks"
 * 08 Feb '10. A bug disabled the entire GE except for the search box. Predictably, there were riots across RuneScape and rants on the official forums. A similar bug occurred on 10 Apr '10.
 * Players cannot take familiars into the Grand Exchange, as it would worsen the already bad level of lag in the area.
 * In the Grand Exchange, some weapons may be held in awkward positions, such as 2h swords in one hand. This is not a glitch, it is merely what you have set your graphics on. In the graphics menu, idle animations can be set to many, few or all. Few and many cause the weapons to wield differently, but only in heavily populated areas.
 * This is also one of the places that has the most lag in the game due to multiple players, frequent spamming, etc.
 * It is often believed that Jagex wished the set-out of traders to be similar to the set-out of the map (herbs in the south-west corner, weaponry and armoury in the north-west etc.) and that this was the initial reason for adding picture icons to the minimap. However, few if any players use this method and prefer to site their trades in other locations at the Grand Exchange.
 * There are exactly 28 trees inside the Grand Exchange walls. This may be a pure coincidence, or it may be that Jagex intended that a player would go around cutting the trees once, forming a circle, banking the logs, then starting again.
 * There appear to be symmetrical faces on the inside and outside of the arch keystones.
 * There was once a glitch where visiting the Grand Exchange would add random players to your friends list. This was later fixed. (These players were not actually random, but people who had talked recently and whose chat names were under the GE item selection interface. This is related to the "Click Through" glitch that caused players to start walking to the floor tile directly behind the [X] button upon clicking it to close the GE menu)
 * Ge_interface_glitch.png is a glitch in which a imp may appear inside the Grand Exchange's desk.
 * Due to lag, the short-cut north west of the GE, going under will sometimes show your character floating above the hole.
 * The Grand Exchange clerks have a small role in Forgiveness of a Chaos Dwarf. The player asks for a set with several items what you need for completing the quest.