Recently there was a surge in the price of SBD and STEEM. The trigger for the surge is a result of how SBD is created, but ultimately the free market conditions allow for price pumps and dumps. I took advantage of the situation and traded on my bittrex account. I had to have several windows open to get price data and I had to determine if there was trade advantage between the pairs. This is something that is very simple but to a non-trade, might be new information. My disclaimer is that you really shouldn't trade alt cryptos like Steem for short term profit unless you really understand what you are doing. So with that said, let's move on!

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If you look at the steemit market exchange feeds right now, you'll see a published price feed from the internal market. What we see right now at 11/24/2017 at approximately 12:30PM:

Bid/Ask for SBD/STEEM is 0.7514/0.7526 for the SBD/STEEM currency pair.

The bid ask spread is so low that we will take the price as 0.750 SBD for this video.

That means you will get 0.75 SBD for every STEEM you trade which means that SBD is more valuable than STEEM is right now.

To verify this, if I go onto coin market cap and look at the price of STEEM in USD, we are looking at $0.943365 USD
which means that STEEM is selling at a discount to the US Dollar. Likewise, if we look at SBD, it's selling for $1.26 USD, which means it is more valuable than USD is right now (this is usually not the case).

If we divide the cost of STEEM by SBD or

0.943365/1.26 = 0.7518

which is roughly the average of the bid ask.

WHEN IS IT IN YOUR ADVANTAGE TO TRADE?

If you want to trade SBD for STEEM or STEEM for SBD or any other coin, you need to know what the ratio was when you first bought your token, be with SBD or STEEM. So, let’s look at an example.

If I bought STEEM at $1.04 and SBD for $0.99, the ratio is 1.05 for SBD/STEEM currency pair, which is what you would see on the published feed on the internal market place.

Recently, we had an anomaly spike occur. We saw SBD reach $2.00+ and STEEM reach $1.20+
Would it be advantageous for me to have sold my STEEM for SBD?

No.

During the spike, the ratio was 0.6, which is less than your purchase ratio of 1.05.

Initiating this trade would have given up 1 STEEM for 0.60SBD, and when SBD returns to its normal parity of $1.00 which it should, you would of ending up losing nearly 40% of your USD investment. The best move here is to trade your STEEM out for altcoin and possibly into cash and then rebuy if STEEM lowers, or simply no action. On the other hand,

Would it be advantageous for me to have sold my SBD for STEEM?

YES!

The ratio works in your favor. If you invert the ratio by dividing the other way, your ratio is 1.66 which means trading out 1 SBD would give you 1.66SBD, a 66% advantage on the price of STEEM.

WHEN SHOULD I POWER UP?

You can only buy SP with SBD on BlockTrades (or use btc/altcoins) and you should only ever buy SBD for long term holds when it's approximately 1.0, so powering up from STEEM to SBD to SP should be a simple matter of when STEEM has risen against SBD.

CONCLUSION

Assuming your SBD purchase price was roughly $1.00USD,

• If you hold SBD and want to trade out to STEEM, you want the internal Steem market ratio to be lower than your purchase ratio.
• If you hold STEEM and want to convert to SBD, you want the internal Steem market ratio to be higher than your purchase ratio.

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LINK TO MAP OF GATE HOUSE BRIDGE