My Tuppence Worth



  • The following words are spoken from inside a suit of armour inside a Chieftain tank.

    I believe the spreads will tighten up as people get fed up with having cash tied up in low-ball bids that aren't going anywhere and either put in a more sensible bid or buy at market price. Competition to be the highest available bid will have the same effect. And the idea, which I have seen expressed in a few places, that 'cap app is dead', has already been proven to be incorrect . Just look at yesterday's rises in both the top two hundred and the squad.

    The lower priced players have always been in that bracket for a reason.....because they are as yet unknown, are at the end of their career, rarely if ever trouble the MB and PB scoreboards etc. That hasn't changed but if people see potential future value in them they will appreciate just as they did before. Those players that nobody sees any potential value in will not. What's new? I am also sure dividends will be increased in due course. It is clear that the 'Whales', as they have been called, are lobbying for that and with FI having reduced its exposure it is likely in my view. Personally I only see this all going one way, which is normal service being resumed.



  • @Le-Blanc said in My Tuppence Worth:

    Those players that nobody sees any potential value in will not. What's new?

    I agree with most of that the only difference being the removal of IS has destroyed significant player value;

    A squad player could have realistically be modelled to win say 10-20p of career/3 year dividends (most likely IPD's outside chance of MB or PB) so had a risk value. He also had an IS price provided by FI of say 30p (last resort exit) so market price was 40-60p on any reasonable estimate. Buyers might win or lose depending on performance but now IS has been removed his value has now dropped significantly (potentially to zero), with all other assumptions remaining the same, his market buy price is now much nearer his dividend potential but less than half his previous market price. This MASSIVE drop in value has come as a direct result of FI unilaterally walking away from their implicit responsibility of market making & such dramatic alterations to players risk profiles will over time have huge implications for future platform growth. Higher prices were actually in FI's interest as they attracted higher commission on sales & gave the impression of a constantly rising market, which supported ever inflated IPO prices which again benfitted FI.

    It also highlights the rather erratic & unpredictable behavior of FI's senior management & for a business that relies on trust, confidence & credibility for it's existence this is a very dangerous image to portray.



  • Agreed and I think the notion that cap app is dead is quite short sighted. Granted much of the cap app over the past few days has been largely due to delisting but I’d argue that the volume of bidding is not in line with a normal market. I’d imagine when traders get impatient with unmatched bids tying up capital and the ME becomes less of a novelty then the market will again begin to function normally.

    When a player is in demand (we’ve seen this with Havertz) then the buy price becomes the only viable option and this in turn leads to cap app. Even when there’s a gap between buy and sell prices, when a player is on the rise it’s very unlikely that a trader will risk placing a speculative bid only to see the buy price rise further and threfore “miss the boat”.

    For those players who have perhaps been overvalued in the past then yes the oppertunity of cap app will be more limited (but not removed) but this is a characteristic of any properly functioning market. In this instance patience and timing will be the key to achieving a suitable exit point.

    I think all in all the introduction of the ME (and future well documented changes) just means that traders will have to be a little more savvy moving forward. In my opinion the days of jumping on a player with little underlying value, riding the rise for a month and disposing for a tidy profit may be over.



  • @Le-Blanc

    I'm in agreement, I believe things will settle down, this is the first true opportunity for the market to realign, those that want to remove money can quickly, those that want to realign portfolios currently are. Bargains are being bought giving speeding the process and we could have 3 or 4 major leagues onboard back playing shortly.

    It might not quite be the same, but the basics will still be in place



  • @NewUser159387 yes they've made a lot of people worthless I used the ipd example before too... Some players only dividend chance is ipds and you have a 30 day window... So the bet was basically can he score enough goals to rise in cap ap so you can sell for profit... Can he score enough goals that your ipds outweigh commission... He scores no goals and I take a small hit proportionate to the reward I was chasing. Why will anyone pay 50p to win 5p ipds again? When the risk is now 50p if the player gets a big injury or doesn't have form for ages then transfers away. Football is highly unpredictable... So whilst it seems like there's still a couple hundred good players... Their prices will reflect the demand and will people want to pay huge prices for the risk?



  • @NewUser159387 said in My Tuppence Worth:

    @Le-Blanc said in My Tuppence Worth:

    Those players that nobody sees any potential value in will not. What's new?

    I agree with most of that the only difference being the removal of IS has destroyed significant player value;

    A squad player could have realistically be modelled to win say 10-20p of career/3 year dividends (most likely IPD's outside chance of MB or PB) so had a risk value. He also had an IS price provided by FI of say 30p (last resort exit) so market price was 40-60p on any reasonable estimate. Buyers might win or lose depending on performance but now IS has been removed his value has now dropped significantly (potentially to zero), with all other assumptions remaining the same, his market buy price is now much nearer his dividend potential but less than half his previous market price. This MASSIVE drop in value has come as a direct result of FI unilaterally walking away from their implicit responsibility of market making & such dramatic alterations to players risk profiles will over time have huge implications for future platform growth.

    It also highlights the rather erratic & unpredictable behavior of FI's senior management & for a business that relies on trust, confidence & credibility for it's existence this is a very dangerous image to portray.

    I appreciate the reasoning....if I have understood you correctly that is. But if a player in the future has a market price 40-60p why do you think no-one will buy him from you at 30p? And also.....if I have understood correctly...IS is still there and very often higher than the 'sell' price published in the pretty pink box.



  • @Le-Blanc said in My Tuppence Worth:

    why do you think no-one will buy him from you at 30p?

    Because his potential earnings are only 10-20p, the 40-60p market price WAS ONLY created by FI offering the 30p IS exit, on top of his earning potential.

    Why will anyone pay 50p to win 5p ipds again? as @Vespasian32 highlights, especially when they are realistically worth 10-20p as a direct result of removing the "sell back to FI at a small loss" option. It may well prove a one off market correction but how does it reflect on FI by deliberately destroying player value?



  • @Le-Blanc said in My Tuppence Worth:

    The following words are spoken from inside a suit of armour inside a Chieftain tank.

    I believe the spreads will tighten up as people get fed up with having cash tied up in low-ball bids that aren't going anywhere and either put in a more sensible bid or buy at market price. Competition to be the highest available bid will have the same effect. And the idea, which I have seen expressed in a few places, that 'cap app is dead', has already been proven to be incorrect . Just look at yesterday's rises in both the top two hundred and the squad.

    The lower priced players have always been in that bracket for a reason.....because they are as yet unknown, are at the end of their career, rarely if ever trouble the MB and PB scoreboards etc. That hasn't changed but if people see potential future value in them they will appreciate just as they did before. Those players that nobody sees any potential value in will not. What's new? I am also sure dividends will be increased in due course. It is clear that the 'Whales', as they have been called, are lobbying for that and with FI having reduced its exposure it is likely in my view. Personally I only see this all going one way, which is normal service being resumed.

    I completely agree but i think the tight spreads will only come about on players where no onenn in is selling so it becomes dead money sitting in a bid that is unlikely to be accepted. The most likely bids to be accepted are the ones with the larger spreads on less desirable players as these are more likely the types of player people will be more actively looking to get rid of.

    I know all that sounds backwards but its how the mentality of trading will work. A tight spread gives the holder confidence they have a good player and a wide spread has them thinking i better get out while i can. If a player has a tight spread you may as well just buy at market price as its likely no one is willing to sell



  • So just to add for information...in case people have not realized...I have just checked three players.

    Tim Kleindienst - Current Buy Price 65p; Current Sell Price - 48p - Instant Sell Price - 60p

    Mijat Gacinovic - 41p, 15p, 25p respectively

    Conor Gallagher - 1.72, 1.55, 1.60p

    Those IS proces are perfectly respectable aren't they? Certainly preferable to those we were faced with up until last week?



  • @NewUser159387 As you’ve pointed out, the buy price is now more in line with a player’s dividend potential. Isn’t this how a player should be valued given the fact the price is driven by the potential for returns? I think the issue many have is that a huge proportion of the index has been overvalued and is driven by sentiment (or more accurately, hype) rather than dividend yields.

    I’d argue that the current system makes players easier to value and these values actually make sense to a traditional investor. To me this is likely to encourage more serious investors to the platform and while it may alienate the weekend punters slightly (those that refuse to adapt anyway) it can only lead to further growth.

    What responsibility do FI have to be market makers by the way? I’m not sure why a trader would be entitled to a bail out option for a poor trade.

    The move towards order books (ME being the first step) has been well documented. While I agree that FI’s communition and road mapling could improve slightly at times, this hasn’t exactly come out of the blue.



  • @Vespasian32 tbh though people still will chase IPDs you saw it yesterday. Plus if they do an IPD increase which i expect they will at some point. That mainly effects lower end and I'd expect we would see a nice rise



  • @MikeWagner said in My Tuppence Worth:

    What responsibility do FI have to be market makers by the way?

    For the future success & prosperity of the platform which not only benefits everyone but pays their wages. I agree that lots of the market was potentially over valued & traders bear some responsibility for that but FI were hardly an innocent by stander in that process. It was them who chose to support & arguably drive those values higher not only by providing IS in the first place but to also drive higher commission & IPO prices on the back of it.

    I have no problem with the market reflecting true player value & order books are a great step towards this but to suddenly withdraw from the previous system of market price support, directly resulting in a collapse of value for certain sections of the market, leaving holders badly financially worse off in the process, can best be described as irresponsible if not totally reckless. Why would those affected ever trust FI again? How does it look to new or potential traders?



  • @Le-Blanc - Those figures are irrelevant. You could have 1 share on the bid making the instant sell price appear higher. Not very helpful if I hold 300/600 etc and want to sell



  • @FI-Ads said in My Tuppence Worth:

    @Le-Blanc - Those figures are irrelevant. You could have 1 share on the bid making the instant sell price appear higher. Not very helpful if I hold 300/600 etc and want to sell

    But isn't that because we are only two days in do you think?



  • @FI-Ads said in My Tuppence Worth:

    @Le-Blanc - Those figures are irrelevant. You could have 1 share on the bid making the instant sell price appear higher. Not very helpful if I hold 300/600 etc and want to sell

    I've clicked randomly on twelve players. of those nine had 'three hundred shares available' for instant sell, which I assume to be the maximum and there are probably more, one had two hundred and eighty-eight, one had a hundred and one had twenty five. I think that's a better way of going about it than simply dismissing it as irrelevant. This is two days in.....given a little time it will all catch up.

    PS....in case you're wondering number keys on my lap top seem to have packed up. 😊



  • @Le-Blanc - Possibly. Lack of football too. Time will tell I guess



  • @FI-Ads said in My Tuppence Worth:

    @Le-Blanc - Possibly. Lack of football too. Time will tell I guess

    ....and the best of luck to us all. Let's all make a mint.



  • @NewUser159387 Firstly, IS has not been removed, it is simply now set by other traders rather than FI, which is more reflective of a funtioning investment platform. Granted IS is not available for all players at all times which means traders must be more patient time their exits. It also forces traders to consider an exit strategy before commiting to a purchase, which they should have been doing anyway. If a trader has purchased futures in a player with no underlying value and as such cannot exit then I’d argue that it is the trader who has been irresponsible or wreckless, not FI

    Out of interest, can you give an example of a specific player that this has impacted?



  • @MikeWagner

    “Consider an exit strategy before committing to a purchase”... that has been at the forefront of my mind particularly following the introduction of ME. Well put!

    I think the concern centres around retirement. Say Ronaldo retired today. What happens to your shares? What could you do previously? I joined in Feb!



  • @PaulM Previously (pre covid and pre ME) FI offered an IS price that was set at a percentage of the market price. This price varied depending on a number of factors but was always available (for the most part - there have been times when IS was turned off e.g. when covid hit) so there was always the ability to sell, even if it was generally at a large loss. The difference now is that other traders set this IS price and you are selling to them rather than FI so for undesirable players there are times when this IS is not available because no one is prepared to buy the player from you at any price (within the bid zone).

    Using the Ronaldo analogy, you’d be stuck with the player and be unable to remove your funds. Hence why it’s extemely important to time your exit. To be fair, if this happened under the old system then IS price offered would have been so low that the difference is negligible.

    Previously traders have rode the gravy train to profit city with little thought about how they would get off, while always having the IS safety net. This being removed seems to have annoyed a lot of people.


Log in to reply