Junk trading refers to an action whereby trade participants used items which had a high GE value but low street value to balance an otherwise unbalanced trade. This was also done when charging players for use of item lending. With the restoration of unrestricted trade on 1 February 2011, this practice is no longer required when selling an item for more than the GE value.
This article deals with the practice as it stood before it was rendered obsolete by free trade. For background, each player had a "trade limit" then which was the maximum imbalance in trades during a given day. Items could be offered on the GE only within a trading band around the "market" price, which did not float freely for most items.
Understanding junk itemsEdit
Junk items are items which have prices usually above their actual value, often due to lack of demand for said item. Good examples of this are low-level unstrung bows. The logs from which the unstrung bows are made can be bought for much less than the value of the unstrung bow. Due to the lack of demand for these types of items they are generally only used in junk trading.
However, for merchants who junk trade with large amounts, junk is not considered as "useless items to be thrown away", but rather, "non-current assets".
Understanding junk tradingEdit
In an example, a trader wishes to sell an item for 100,000 coins, but the item's Grand Exchange value is only 50,000 coins. To accomplish this trade, the buyer adds 50,000 coins worth of "junk". The trade is then equalised and completed. This type of trading may also be used when lending items. Because the 50,000 coins worth of junk is useless to the seller and/or impossible to sell, they will be more than happy to use it in a trade to equalise the price.
It is best to personally make junk items, as opposed to spending coins on junk. In the above example, if the seller had spent 50,000 coins on the junk, the profit from the sale would be negated by the cost of the junk. However, if the seller had actually made the junk (while training Fletching, for example), there would be potential for substantial profit.
In most cases, it is possible to buy crashing junk for the minimum price on the Grand Exchange, and then use it in a trade at its medium price. This does not result in as high a profit as producing the junk yourself, but will still allow for a profit equal to the difference between the item's medium and minimum prices multiplied by the quantity of the item. High volume of a cheaper item is generally preferred to a more expensive item because it makes it easier to offer the least amount of junk required.
Example: Player A wishes to sell an item to player B. The item has a Grand Exchange price of 10,000 coins, but a street value of 100,000 coins. Their trade limit is 25,000 coins, so 75,000 coins of junk will be needed to make up the difference. Player A could accomplish this by buying a blue broodoo shield on the Grand Exchange for 63,300 coins (approximately) at minimum. Its medium price is 66,600 coins (approximately), enough for the trade to take place. This will yield a profit of 1,700 coins, or only 2.6% of the 65,000 coin potential profit (in addition to the 25,000 coin profit allowed by the trade limit). However, if Player A instead purchases maple longbows (u), (s)he will be able to turn a higher profit. Maple longbows (u) have a medium Grand Exchange price of 105 coins, so it will require 620 of them to supply 65,000 coins of junk. They have a minimum Grand Exchange price of 100 coins, so this will cost 62,000 coins. In this case Player A is able to turn a profit of 3,000 coins, or 4.6% of the 65,000 coin potential profit. The higher volume and lower price of the maple longbows (u) worked in Player A's favour even though the difference between and medium was about the same - 5%. Unfortunately, this method never allows for a greater than 5% profit, so it is still much more profitable for Player A to make his/her own junk. If Player A purchases 620 maple logs for 51 coins each on the Grand Exchange, it will only cost 31,620 coins. After fletching them into unstrung longbows, Player A can then use them as junk and would make 33,380 coins, or 51.4% of the 65,000 coin potential profit, in addition to receiving some free Fletching experience.
Note: All prices are current as of 7 July 2010, but the specific items and prices are not relevant. The same principles apply to all junk items. Also, if buying junk off the Grand Exchange, the junk item must be crashing so that it can be purchased at minimum.
Another way to get rid of junk items is to buy items commonly used in PvP situations, that buys in Grand Exchange but takes a while, and sell it together with junk in a PvP world. Also, another way to get rid of junk is through lending rare with junk in trade. For example, lend a santa hat with 200k junk for a 24 hour period. The same can be done with member items such as ags or even dragon claws.
Jagex's opinion on junk tradingEdit
|“|| Q) Kiper1 - What else will be done to combat Real World Trading (such as using junk to transfer gold between accounts.
A) I don’t consider junk trading a problem. I am actually quite happy that it is making those ‘junk’ items perceived as more valuable. It doesn’t allow real-world trading, but does let people do the trades they want. I see it as a good thing! Bounty Hunter is going to be further tweaked.
Common junk itemsEdit
- Unstrung bows (under Yew)
- Poisoned arrows/darts
- Summoning pouches
- Summoning scrolls
- Javelins (and their poisoned versions)
- Unstrung symbols
- Willow logs
- Bronze to Adamant weapons/armour
- Arrow shafts
- Unfinished arrows/bolts (apart from broad bolts)
- Broodoo shields
- Swamp lizards
- Low level Seeds and potions
- Adamant arrow (p++)
- Mint cakes
- Triangle sandwiches
- Juju vial of water
- (red) Chinchompas
- Granite Maces
- Most heraldic armour (except some runite armour)
(Some of these items do sell on the Grand Exchange from time to time)