Trading Fees and “Spreads” On Icecap’s Marketplace.
At any given time, dozens of diamonds are offered for sale on the Icecap marketplace. These could be newly-issued diamonds coming from diamond cutting centers around the world, or they could be secondary-market diamonds coming back on the Icecap marketplace. Each diamond has an asking price, and is shown with its corresponding value index rating, based on that price.
Example process of buying and selling on Icecap
- Buy: A hard asset investor purchases a diamond off the Icecap marketplace, presumably choosing the one at the top of the value index, or nearby.
- Hold: Time goes by, while the diamond is held by the buyer. That might be an hour, a day, or ten years.
- Sell: Assuming no underlying price movement in the interim, the seller would sell their diamond by pricing it near the top of the (then) value index. Hypothetically, if nothing else had changed, that would be for the same price at which they purchased it. But the seller would pay a 5% commission to complete the transaction, once the diamond sold.
Thus in the above example, with no underlying changes in the market, the effective “in-out” spread paid by the trader would be a total of 5%; in other words, the commission. (This is similar to the real estate market, and far better than the traditional diamond market.)
Note: Unlike in the gold market, selling a diamond is not an instant process.
The diamond is listed on the Icecap marketplace and—assuming it is at or near the top of the value index—it will likely be the next, or close to next, diamond to sell. The lower the price (and better the value index rating) the faster it will sell. Traders must assume this process could vary from a few hours, to days, or worst case even weeks depending on trading activity.
Icecap’s Price Level vs. Wholesale.
Generally Icecap diamonds are trading at approximately ten percent above the wholesale market price, and significantly below the retail market (which of course varies substantially.)