Market Manipulation



  • Hi everyone. I am getting worried that FI are starting to artificially stimulate the market using some pretty underhand tactics. Now, I truly and utterly hope I am wrong, as if true, they will eventually get caught out and traders will leave. So I do hope I am wrong and it is in my interest to be wrong. However I have seen a few incidents recently to make me think this. Each one in isolation is pretty harmless but together makes a more complete picture

    1. High price IPO. I think most people agree that most players are getting IPO'd at stupid prices. The best evidence we can see of this is when they fuck up and put on a player already on the Index. In every occasion this has occurred, the IPO price is about 30-40% higher than that players current market value! And people question why they do this, as it means less people buy the player rather than if they chucked them all on at 20p. I think this is a deliberate strategy and they aren't stupid. And the reason I believe they could be doing this, is to try and make other players seem more attractive and people buy into them instead. I have even seen people on this forum do this, where they say X is really cheap if you compare him to Y (IPO).

    This is the type of dirty underhand tactics the housing market uses, particularly Foxtons. Raise the price of a couple of houses in a neighborhood to a staggering amount, and then watch as all the houses around them surge. But it is creating artificial value.

    1. These Trader wins 1k competitions. The market has been pretty flatflined for a couple of weeks and so what better than to get everyone to chuck in a tenner to stimulate. Which seems great on the surface and harmless. However they did this last time the market flatlined, and it is for a competition that I won't win, you who is reading this won't win. It doesn't benefit most traders.

    The facts are that maybe the market is probably becoming a bit saturated under the current dividend structure. The Footsie has just about doubled since the last time dividends increased which would probably make sense that we are reaching close to that saturation point. And rather than increase dividends, they are trying a few underhand tactics to squeeze the market as much as possible first before committing,

    I'm sure this will get backlash from people who think FI can do no wrong however



  • @Dr-Jan-Itor Point 1 is absolutely spot on in my opinion. I'm sure FI will argue that IPO prices are rising in line with the market, I would counter that and say whilst yes the market is rising look at the prices of similar players to the ones you are about to IPO. The inflated prices are to stretch the market and ultimately it will bit them as in a few years many players will be untradeable due to the fact that price cant drop below IPO price (unless order books change this which I guess is possible). At current dividends value is fast disappearing but that doesn't seem to stop people buying so you could say the market is as much to blame as FI - if we are silly enough to buy things above their true value then more fool us. The only way I see it changing is if the market says enough but whilst people are making so much money that's unlikely to happen.
    The competitions don't bother me as much, I would much rather those than the cycle of deposit bonuses we were getting last year.



  • Point #1 - if they were overpriced then few people would buy them. IPOs are not a right for people to make free money.

    Point #2 - nobody needs to deposit. They are giving away free money ffs, how can you moan about that?



  • I don't think they can do no wrong, but I would still question whether this is manipulation of the market.

    IPOs were too cheap and maybe they have gone the other way, but I wouldn't call it market manipulation. I absolutely hated that IPOs were seen as a way of guaranteed earning of money with no skill at all. I thought Pacencia would have been good to have at a pound, but they Ipo'd him higher so I didn't buy him.

    I do think they are making more money doing it this way, however there's definitely less people buying in huge amounts and if I win a grand tomorrow, even better!



  • I trust FI on the IPO prices as they say they do intensive modelling though, but I certainly don't agree with them - we are getting 'wonderkids' on at a high price, but what if they become a Franny Jeffers and flop? They won't go below their ridiculous IPO price. There should just be one standard low IPO price (e.g. 20p), and the current way of putting them on should mean that servers won't get overloaded too much. Maybe a purchase limit for the first week of IPOs. But there's plenty of threads on ideas to improve that system.

    The competition is pretty harmless I'd say, but indeed I would rather have a dividend rise than a small chance of winning a Fulham shirt. Hopefully they might still have that up the sleeve for their birthday announcement - dividends have been this way for 6 months, but the growth since then has been unprecedented.



  • @CBN said in Market Manipulation:

    Point #1 - if they were overpriced then few people would buy them. IPOs are not a right for people to make free money.

    People buy IPOs because they think other people will not because they are value.
    If you can honestly tell me that Marvin Friedrich (70p IPO) and Christopher Lenz (60p IPO) - 2 defenders at Union Berlin - aren't priced too high when someone like Jose Gaya - Valencia with CL and Spanish international linked to Chelsea is 63p then I'd be surprised. The high IPO prices are to stretch the market and it works because people compare player X to player Y so now everyone will go oh Gaya is cheap and push his price up. All the time this pushes prices up making dividend yields smaller and smaller.

    I love FI, and defend them on many things, but they are deliberately stretching the market with IPO prices.



  • I do question some of the price and wish they would do other things but I think it's a bit far fetched to call it market manipulation.

    IPO's are a balancing act, they've been too cheap in the past and some have been too expensive, players will find their natural level. I do agree that it is hard to compare players when you think some young IPO is worth more than a guy who plays every week but, like in the transfer market it's what people pay for potential in the hope that one of them will be "the one" who becomes a wonderkid



  • If people are not happy with high IPO prices, don't get involved. Simple! FI seem to be damned if they do, damned if they don't. When IPO prices were lower, people complained it was very difficult to buy at a good price because of robots.

    As for the spend a tenner to get entry into a prize draw, why not? Most users spend 10 pounds+ pretty regularly on here anyway so to do so for a chance of winning a bigger amount, sounds fine to me. We've all got the same chance of winning and I seem to remember at least one or two of the winners last time being posters on this forum.



  • @Brane_Ormso said in Market Manipulation:

    players will find their natural level.

    That's the problem tho they don't because they cant go below their IPO price. So take the 2 players I mentioned above they can never go below 70p/60p so in all likelihood sit on the index as 2 untradeable players.
    I would agree with the statement if they could keep dropping until they started getting buyers as they would then find their value and be tradeable.
    I don't necessarily blame FI for what they're doing, and I do think market manipulation is too strong a term, but they are stretching the market.



  • I agree the latest IPO’s are currently being released at silly prices in order for them to put larger spreads on them.

    Also I noticed the spreads on the international players had increased and I only bought a player yesterday and by the evening without him rising a penny his spread had doubled.



  • @Dr-Jan-Itor I don't think having IPO's at higher prices is much of an issue - it stops people making a quick buck and other people getting burnt. If you don't think that player is good value, don't buy.

    I think really cheap IPO's cause more long term damage for FI and its reputation than higher priced IPO's. More people were affected negatively with cheap IPO prices. Imagine you are new to FI and invest in IPOs because everyone says you can make easy profit and end up losing hundreds. That would put me off

    As FI gets more established, it becomes more and more like a conventional trading platform, where you need a bit of skill and knowledge to succeed, if you are silly enough to buy IPO's without researching and identifying the true value, then yh you should lose money.



  • @Boris999 are you even reading what people are saying? Or just trying to get on your high horse and struggling. We are not talking about whether or not people purchase IPOs at their entry price. We are saying they stretch the market. If a bunch of new promoted defenders get added at 20-30% higher than the average pb defenders at established clubs, then all of a sudden those defenders at other clubs look really attractive. That is despite that 1 minute before those new players were added, the market had determined their value.

    Exibit A on how this works https://forums.footballindex.co.uk/topic/12440/what-is-going-on/2



  • @janner73 said in Market Manipulation:

    That's the problem tho they don't because they cant go below their IPO price. So take the 2 players I mentioned above they can never go below 70p/60p so in all likelihood sit on the index as 2 untradeable players.

    You're rather missing the point the price that the IPO is issued at is just the base price level, which they can't fall below, it's actually the number of futures that help MOVE the price;

    IPO at 60p - no futures issued price remains at 60p then 9k futures bought moves price up to 70p approx.

    Existing player at 60p may have 50k futures already issued so 9k futures bought also moves price up to 70p approx. BUT 9k sold price would drop to 50p where as that's impossible for the IPO at 60p as you can only sell a maximum of the number of futures that are already in circulation.

    Whilst I agree it makes comparisons between the 2 types of players far harder it actually makes sense, as has already been pointed out IPOing at a low price simply benefits bots with free money & risks burning genuine buyers. The simple answer is to avoid any player you think doesn't offer value, no one is forcing you to buy any player but buying at or around the IPO price is a very low risk option as it largely prevents the chance of a capital loss (assuming you are prepared to market sell & wait until a buyer takes your futures up).



  • @Dr-Jan-Itor I concur.

    In short, the prices of IPOs are ridiculous. The lower end of the market is now the only place to find any potential value, hence the shift of interest to cheap IPD buys and youngsters.

    This will be corrected with a dividend increase but if you consider that in pre share split prices, Todd Cantwell is £5.34 then you have to question where there actually is value in the market.

    The only alternative would be to lengthen holds to over 3 years but I don't think that's possible



  • @Lukeroro Agree with you that dividends need to increase and i think it's inevitable that they will...



  • I'm fairly sure that the high IPO prices are a response to the constant complaints they received about bots hoovering up cheaper IPOs as soon as they became available.

    This way there is little or no point in using bots, because the vast majority of new IPOs are just not that attractive to buy in the first place.

    Personally as someone who doesn't get involved in IPOs, I don't want cheap IPOs undercutting my existing holds, so the high IPO prices are fine by me.



  • @ocs123 said in Market Manipulation:

    high IPO prices are a response to the constant complaints they received about bots hoovering up cheaper IPOs

    Yes & good riddance to those users, automatically stockpiling desirable players then reselling them at higher prices just to take almost risk free profits.



  • I believe the high IPO prices are most likely to stimulate growth and make a lot of existing players look cheap by comparison. However i cant see why you would be complaining its not the same as the housing market or any physical thing that holds value, its a virtual share and prices going up doesnt mean you are getting less for your money so to compare it to housing market tactics is ridiculous. The reason we are all here is to earn money from market growth so why complain when FI are doing everything they can to keep us all happy. You dont have to buy IPO’s and if you, like me think this is a way to stimulate the market then the smart move is to buy those players that the IPO’s make look cheap.

    I sometimes think folk just like to moan no matter what. Im quite happy that FI are constantly doing thinks to offer a fairer product by having as many eligible players available to us as possible and that they are also doing promotional work to keep people interested and to spread awareness of the product across social media via retweets and likes.



  • @NewUser383114 said in Market Manipulation:

    @Dr-Jan-Itor I don't think having IPO's at higher prices is much of an issue - it stops people making a quick buck and other people getting burnt. If you don't think that player is good value, don't buy.

    I think really cheap IPO's cause more long term damage for FI and its reputation than higher priced IPO's. More people were affected negatively with cheap IPO prices. Imagine you are new to FI and invest in IPOs because everyone says you can make easy profit and end up losing hundreds. That would put me off

    As FI gets more established, it becomes more and more like a conventional trading platform, where you need a bit of skill and knowledge to succeed, if you are silly enough to buy IPO's without researching and identifying the true value, then yh you should lose money.

    There's more to it when it comes to IPOs though.

    In order for FI to continue to grow, one of the things they need is to continue to release new players, and if they're unable to do this at a price that people are happy to pay, then they're essentially creating untradeable players, which is in nobodies interest.

    If they're putting them on at a high price to stop bots, then that's just plain wrong and would mean they're correcting the problem in the wrong place.



  • @ocs123 said in Market Manipulation:

    I'm fairly sure that the high IPO prices are a response to the constant complaints they received about bots hoovering up cheaper IPOs as soon as they became available.

    This way there is little or no point in using bots, because the vast majority of new IPOs are just not that attractive to buy in the first place.

    Personally as someone who doesn't get involved in IPOs, I don't want cheap IPOs undercutting my existing holds, so the high IPO prices are fine by me.

    But the original poster is right, it's forcing the bottom of the market up to the level of 60/70p and surely the share split was to make every player cheaper and more available.

    Remember Elmohamady is on the Index at 29p and they tried to IPO him at around 70p before realising he's already on.

    The current prices are probably higher than the boys even boosted them up to anyway. It's not right.


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