In the wholesale market for coins, which is dealer-to-dealer trading, some dealers buy and sell coins through electronic trading networks.

The dealers who use these networks regularly post "bid" prices or the prices they are willing to pay for certain coins. Many bid prices are sincere attempts to purchase coins wanted by customers, but others are attempts to buy great bargains if willing sellers are found.

Participating dealers also post on the network "sight-unseen" bids, in dealer parlance, indicating a willingness to accept any coins graded by particular grading services in the grades they are seeking to purchase.

Usually these sight-unseen bids are much lower than the levels coins of the same grades are actually trading for in the market because the dealers will have to purchase such coins whether or not they like the looks of them.

Sight-unseen and "sight-seen" bids are published in regular reports to dealers, one of which was established way back in 1963. Such bid prices are routinely used between dealers on a daily basis for trading coins on a wholesale basis. "Sight-seen," in dealer parlance, means dealers reserve the right to return coins once they examine them if they find that they don't like the look of them.

Unless dealers are market makers who are posting such bids or are tracking major coin auctions, they have little else to use for references for wholesale trades.

In fact, most dealers do not buy and sell coins via electronic trading networks. Instead they rely on published bid prices.

"Retail" values, which are the prices that Coin Values reports, are prices you can expect to pay when buying from a dealer whose markup over wholesale allows him to cover the cost of doing business and earn a living. Retail prices generally are about 30 percent higher than wholesale levels.

However, in the current market a tremendous shortage exists of quality coins dealers need for their customers. We've ob¬served dealers at major auctions paying at least – and often more than – our published retail values. This occurs in a rising market, causing higher retail values to be reported after these trades have been observed.

At both the wholesale and retail levels of the marketplace, premium-quality coins usually trade for much higher levels than typical wholesale bids, as do more ordinary examples of the same coins when they sell. However, substandard coins for the grade trade for low price levels on both the wholesale and retail markets. As we've noted in past columns, dealers can have difficulty selling substandard coins.

Some examples that illustrate this trend are listed in the accompanying table.