Why taxing buyers 2% makes no sense



  • Buyers are what drives the market growth, the only reason the market rises is because (buyer created) demand exceeds supply & FI have just capped this demand to 98% of it's potential; charging 2% to make an order book bid just reduces their net buying power to 98% instead of 100%. Of course an individual trade can still be profitable by pricing it at less than 98% of the buy price but FI have effectively just DOUBLED their commission from 2% to 4% (except if you use the Buy it Now option, which effectively neuters the whole point of order books) as every buyer will need to sell at some point & pay the 2% commission to secure an exit to unwind any buy trade. Buyers now have to factor in this double commission, so buying now not only looks less attractive but also they only have 98% of their firepower left to create demand.

    Everyone seems to be expecting huge bargains, based on 60% of buy price bids being available, which may happen initially whilst the desperate (who have been trapped by expanded spreads) attempt to exit but what happens once these "hostage sellers" have been exhausted; spreads will narrow & discounts become less attractive. Order books will eventually lead to better prices for both buyers & sellers but charging buyers a 2% premium will lead to less demand, less growth & poorer overall returns for everyone (except FI in short term revenue). No problem with FI making a profit but their ultimate success will be far higher weighted on the successful growth of the product rather than the level of trading commission they set, so my advice would be to drop the 2% buyers tax for the benefit of everyone, including FI, over the longer term.



  • Buyers aren’t being taxed at 2%.

    Buyers buying at less than market price are paying 2%.

    If you don’t want to pay the commission, pay the market price. Otherwise, get yourself a discount, make somebody’s day who’s trying desperately to sell a player and help fill FI’s coffers whilst we’re at it, funding future dividend growth for the platform.



  • @TT

    It reduces their net buying power to 98% instead of 100% - demand is therefore less. Market price is determined by supply & demand which could be established using order books. Buyers are creating the market price, in tandem with sellers, not paying less than it.



  • @NewUser159387 said in Why taxing buyers 2% makes no sense:

    their ultimate success will be far higher weighted on the successful growth of the product rather than the level of trading commission they set

    Also I really have to take issue with this.

    People obsessing about growth all the time is why people often take a look at FI from the outside and immediately think “Ponzi”.

    If FI want to be a serious, long-term company which runs on a financially sustainable business - something we surely all want given the sums of money people have tied up here - they have to find a way to ensure that dividends paid are always covered by commission earned. That’s recurring costs of running the business being paid out of recurring income. IPOs etc are helpful in making the business profitable and paying the overhead but in the long-term it is all about commission.

    In a mature market prices will be more closely tied to the value of future dividends. How can FI pay more dividends in a sustainable way? Generate more commission. There’s 2 ways they can do that - generate more trading and generate more commission per trade. I suspect that today’s announcement is going to tick both of those boxes.



  • Nobody will be paying 2% unless they are saving over 2% on the buy price. It’s really not that difficult to understand surely?
    Threads claiming we are being taxed to buy players are simply not true and also damaging for both the community and the product. Gain a thorough understanding of the changes and if you are still unsure, ask FI for clarity. Writing false info on this forum is not helpful.



  • Whichever way you look at it, it is 2% less for us as traders and 2% more for FI.

    I don’t think it’s unreasonable, but it will make me more cautious when considering whether to buy a player - knowing that I’m likely to be paying 4% in total to enter and exit each trade.



  • @NewUser159387

    No it doesn’t, it’s still exactly the same as it was before.

    If Bruno is £10 in the current system, he’s still £10 with the matching engine. If you can buy him on bid for £9.80, he’s still £10. If you’re daft enough to buy him on bid for more than £9.80 then sobeit.



  • @Thatguy

    Market price is determined by supply & demand which could be established using order books. Buyers are creating the market price, in tandem with sellers, not paying less than it.



  • @NewUser159387 it's 2% mate, hardly gonna stop me buying, increase their div pot for the future as well



  • @NewUser159387 said in Why taxing buyers 2% makes no sense:

    @Thatguy

    Market price is determined by supply & demand which could be established using order books. Buyers are creating the market price, in tandem with sellers, not paying less than it.

    So you really think when Jamie Vardy is £1 and scores in an early kick off that nobody will match the buy price and will look to undercut it? Some may offer 97p but will simply not get him as others will pay the quid and the price moves up making the 97p even less attractive.
    There will be times where order books bids are best and times when matching the buy price is best. It is up to us as traders to use it to get the best price we can use a little skill.



  • The problem is that if that in order to take the risk of buying a player who does his acl before you can retract a bid then you will need a significant discount. Probably 15 percent.

    So a lot of bids will be unmatched meaning money tied up.

    Without the 2 percent, people would try and skim the market but this probably wont happen now. You aren't going to try and trade thin margins if you are paying 4 percent to buy then sell.

    Also worried people won't buy at market price now they will just try for the discount so you might actually see less trading.



  • Ffs if you dont want to pay 2% pay market price. There offering you the chance to make say a 10% discount and your bothered about 2%. When FI were buying your futures when you IS they were making more than 2%. FI make money we make money



  • If you don't like being 'taxed' 2% on your purchases, I'm sure your local bank will be happy to look after your money instead. They'll even give you 0.01% interest on it 🤑



  • @TT said in Why taxing buyers 2% makes no sense:

    @NewUser159387

    No it doesn’t, it’s still exactly the same as it was before.

    If Bruno is £10 in the current system, he’s still £10 with the matching engine. If you can buy him on bid for £9.80, he’s still £10. If you’re daft enough to buy him on bid for more than £9.80 then sobeit.

    BANG ON... its actually amazing how people get things so twisted, its simple!!



  • Pretty new to FI but just a thought people not happy with the 2% could it not mean a bit more profit for FI but then in turn they might give bigger or better dividends out on players as well in the long run



  • Wow just wow 🤦‍♂️



  • @2006eyo why are you not happy?

    You can either buy the old way and pay no commission EXACTLY AS NOW. Or you can perhaps get someone 10% cheaper and pay 2% commission. What is the problem? FI need to make money. If they don’t we all lose everything. It could also enable them to increase dividend and better offers in the future. It really isn’t a big deal. You can ignore the new structure and use the platform exactly as before if you disagree with commission on buys.



  • Good post and thanks to all for the above points which has made it clearer..

    After reading all the posts I believe the 2% commissioning on buying is a good thing for both traders and FI and as people don't like change there is bound to be some confusion initially, but overall great for the long term longevity of the platform



  • It really is that simple to understand. You get a better deal than market price, FI take their cut, you have instant profit... voila


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