US/EST: 08 Mar 2021 01:30

Price Value Ratio and ROI

posted by rkruok, almost 11 years ago (16 Mar 2010 02:09)


Price Value Ratio and ROI When buying shares on ChipMeUp, you will end up on the player's event page and see a number under the share price, called "price/value" (as seen below).

What is price/value?
The price / value percentage equates to the premium that you have to pay to buy a share. If you were to buy 10% of an event that cost $100 (including the rake) you might expect to pay $10. As 10% of a $100 equals $10. This would equate to a price / value of a 100%. However if you were to pay $12, the price / value ratio would in fact be 120%. So you are paying a 20% premium on the event.

Why should I pay a premium?
More often than not you have to pay a premium, because the player is the one putting in the time and effort trying to win money for himself and the share buyer. The price / value also takes into account the skill of the player.

Lets say for example you go to the player's profile page and you see their ROI (Return On Investment) is 50%. That simply means for every $100 the player invests / buys-in for, he/she returns a 50% profit, ie. $150. So a player like that would often charge at least a 150% price / value ratio and perhaps even up to 180%.

What about players with negative ROI?
The ROI takes into account all the tournaments the player plays, so sometimes a player will have a negative ROI, but they are a winning player in certain games. These shares may still represent good value. Also the big tournaments like the Sunday Million, represent such a big score for the investor that sometimes it's worth paying the extra premium.

Whilst these numbers are important in working out a bargain, there are other important considerations to take into account, we'll take a look at these in future articles.

Good luck !

Tagged as price value ROI pv


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