Could someone explain how Greysheets "bid and ask" works?

JOHNandBEA

I just started subscribing...........thanks

John

MrEureka

Read the section at the bottom of the first page of every issue.

RYK

Aw, come on, Andy, it's more involved than that! What about all this "back of bid" business, collectors trying to buy at bid, etc.?

JOHNandBEA

Ok thanks...


John

JOHNandBEA

RYK.........

Is this what they refer to as "fair market value"?

RYK

John, I am sorry, I do not know a whole lot about it either. I think that the greysheet refers to sight unseen bid and ask pricing in the wholesale market. I think that there are other nuances that the more experienced collectors and dealers here can share with us.

Robert

Max

JohnandBea,
Great you got the Greysheets. Now you are ready to walk the coin show floor and be sneered at by dealers who don't like an educated buyer. They will tell you all the reasons who you must stop following those sheets when buying. When it comes time to sell they will offer you 10-25% "in back of bid" or less than the bid price.

It's a real education. You'll learn quick to buy/sell to other collectors closer to the B/A prices you desire. Have fun!

JOHNandBEA

Robert, thanks........

John

JOHNandBEA

Max.....

Everyone needs to make a profit of course, but it sure would be nice to know where everybody stands........thanks for the insight


John

stman

How does greysheet bid and ask prices work?

It doesn't.

cladking

Greysheet bid is the price that motivated buyers will pay. Ask is the price that unmotivated
sellers will sell. With moderns many will trade at ask or a percentage above or below
ask. When purchased over the counter the dealer wil typically offer 80 to 90% of bid but can
sometimes be somewhat lower. It is not too unusual to see offers to buy at prices well in excess
of bid, but when it is a large national buyer greysheet will quickly respond with a higher bid. Most
moderns can be sold at bid but will sometimes have to be shopped around since most buyers have
an interest in only some categories.

Greysheet does not list high grade moderns and most large modern buyers will not accept very poor
specimens at any price. Even some mint set coins are not of sufficient quality. While most are
ok about 75 to 90% of the time. Ugly and baggy rolls are typically returned. Most buyers are more
tolerant of mint and proof sets so long as thgey look ok and are not tarnished.

JOHNandBEA

cladking..........

That was good..........

Much thanks


John

MrEureka

Just a few observations:

Bids usually only get "hit" (i.e., accepted) after the coin has been thoroughly shopped elsewhere at higher prices. Therefore, very few bids actually get hit. For sight-unseen bids, this situation is even more pronounced. If the bidders have trouble buying at bid, you should see a huge red flag when you are offered something at bid. Either something's wrong with the coin or, more likely, the bid is obsolete or otherwise misleading.

Because the highest bids are rarely hit, it's reasonable to assume that the motive of the bidder has little to do with buying at that level. In fact, the motive is usually either that 1) He's advertising his presence in the market (inviting sellers to offer him coins, even at higher prices) or 2) He really doesn't WANT to buy - he's just trying to manuipulate the Blue/Graysheet prices. As a result, the sheets are often misleading, but not always on the low side.

Almost anyone willing to buy at prices substantially higher than "bid" would be a fool to publish his "real" prices. Publishing his higher bid would educate the competition, send the market higher, and increase his purchase price. Likewise, sellers willing to sell at a discount to bid would be crazy to advertise the fact. The sheets would pick up the discounted asks and reduce the sheet prices, thereby forcing the "market" price lower.

The bottom line is that the Graysheet is very appropriately named. There are many gray areas when reporting coin market prices.

One more thing. More than 90% of the deals on Eureka have taken place at prices above the highest bid PUBLISHED on Eureka. We never report the prices of our trades, not even to the Graysheet. Think about that...

JOHNandBEA

hmm..........a bit more involved then it first appears.........

Guess I need to google Eureka next.........

MrEureka thanks

John