Seeing Things Differently (Case For The Defence)



  • TLDR (too long didn't read) version:

    • Just be patient and give FI a break
    • Buy Orders are just a quick exit for those who require it
    • Offering IS increases FI's exposure too much
    • Covid is on its way out, but now we think about the economic impact
    • Looking back, this will all make sense and everything will be fine

    Wanted to share some thoughts about the current sentiment towards FI at the moment and see what others think.

    A lot of negative talk on Twitter and here on the forum about about the removal of IS, 'Changing bets' and general hostility towards FI and Adam Cole.

    This isn't a simple 'you placed bad bets' response either. Some of you may have read my previous posts criticising FI for removing IS and why this is required to underpin the market.

    However, I've taken a somewhat step back the last few days and starting to see things differently.

    I keep hearing 'We have buy orders only', when actually, the purpose of introducing them was to enable some to sell. Its in FI's interest to sell new shares via market is it not?

    When Covid hit, if FI had offered IS they were buying back shares. That did and could have escalated very quickly. Panic spreads panic. Uncertainty abound as prices drop which only escalates the problem. We all know where this ends. FI left holding all the shares and fastest finger first.

    FI suspended IS as panic spread. Thank goodness they did. However, as the weeks/months passed, there was a need to traders who needed cash to sell up. Valid arguments for both sides. FI can't swing the doors open and allow everyone to IS, at the same time, they can't lock money in forever though either. 'Buy' orders was on balance the best solution. Keep money in the market, control liability for FI, but allow some to leave and take their cash. Yes, I know the prices are low, but nothing about this spring/summer has been an ideal. We should prepare for uncertainty and storms ahead.

    FI's accounts and controlled liability are absolutely crucial to the security of our bets/investments/alternative asset class🙂

    From a legal perspective, if FI do not expire our bets, and do offer an IS themselves at some point, then I don't believe they can or should be punished. Rightly so, there's no obligation for them to offer IS 100% of the time. We all know this was removed under exceptional circumstances - serious injuries etc. Well I put it to you, the FI community that Covid is one big exceptional circumstance.

    Sadly, as nice as it is to see our cafes and shops reopen, we are nowhere near the point of recovery from Covid. Millions of workers being subsidised by an unprecedented support scheme which was extended to end of July/ October. Sadly, although we will likely all be safe and healthy by then, many jobs will be lost and the economic impact will really start to bite.

    If course, there may well be an economic solution, or even a plan from central governments/ global leaders, but we won't hold our breath on this one. That's for another thread.

    In defence of the EDD problems, is this not due to people withdrawing large amounts recently due to above? Let's give them the benefit of the doubt here as well. Better that we can trust procedures have been followed.

    Long term, I now suggest to you that IS will be reinstated by FI when the time is right and a valid lesson will have been learnt. We will look back and it will all make sense.

    Of course, FI could confirm this which would certainly reassure traders, but any guarantees are difficult at the moment and we've all seen how hostile some have been on Twitter and elsewhere to any comments made.

    In 6-12 months, we'll look back at the Tweets and posts and remember the pain and tantrums but be glad of how it was handled.

    Please enjoy your afternoons and keep the faith.



  • Excellent post and cannot really pick apart any of it.

    But my worry is that the platform has become BORING. I never used to buy in play on goals but the buzz created by others doing so was, in hindsight, an important part of the platform.

    Am sure they'll do something to fix the issues, they always have in the past.



  • To begin with I was suggesting that FI should privately offer IS option as a get out to those who felt trapped. But I thought about it some more, and if they did that then someone would post a screenshot on Twitter of FI allowing them out - and within 10 mins everyone would be emailing FI demanding a get out for shares they are not confident in any more.

    There is no easy solution. I think they have done right by some and wrong by others with ME - but I can completely appreciate that they have offered about as best as they can given the circumstances



  • @CBN Thanks. Agree that it is dull at the moment. Also sad to see players topping the PB matrix with no price movement or bids.

    A bit like this evenings match? So much potential and should have been a cracker but disappointing. Not their fault. No atmosphere kills it I think.



  • @Baydog yes there's certainly an argument that some should be considered on an individual basis, but yeah, what a nightmare that would be to work out. Everyone negotiating get out prices.

    I'm hoping they extended the cash back introductory offer. Would be a shame if someone joined in Jan/Feb and had to now sell at a big loss.



  • The other thing is we are in an unprecedented time in terms of not knowing what cycle we are in. All the leagues that are starting up now are near the end of the season to some extent so in normal FI terms, we would normally be selling PB players moving the money to transfer holds.

    But at the same time, it's difficult to know if there will be a proper transfer season. There is no Euro 20 so that is out. In short there is no obvious place to put your money. Without the ME, without them messing around with IS, we would still be a in a position where we would be selling PB players but no knowing where to put the money.

    And it goes on...

    There is talk of PB matrix reviews making people uncertain over whether current PB players will still be good PB players.

    There is talk of media changes so will current media players retain their media value.

    If the ME had not existed, if IS was unchanged, we would still be in an unprededent scenario of cycles ending, traders wanting to get out of certain positiona but it being incredibly difficult to know who to buy.



  • @Baydog said There is no easy solution. I think they have done right by some and wrong by others with ME - but I can completely appreciate that they have offered about as best as they can given the circumstances

    Well put Baydog. They have done well in a bloody difficult situation.



  • Well said Buddy,

    A lot of people who were constantly moaning have hidden agendas as well, but personally I think FI have done a great job pre, during, and post-Covid.

    This will all be a distant memory within a few months and then there will be something else for certain traders to complain about, as its just their nature.



  • @Metropolis said in Seeing Things Differently (Case For The Defence):

    Long term, I now suggest to you that IS will be reinstated by FI when the time is right and a valid lesson will have been learnt.

    Whilst I agree with most of your thoughtful & balanced post I would just caution about the potential return of (FI backed) IS. That boat has sailed I'm afraid & there's virtually no chance of it returning; the next step will be the introduction of sell orders, allowing full OB's, so demand & supply can then interact to find a TRUE market price equilibrium (highly likely to be at a lower level than current MB price, at least initially until organic platform growth raises prices across the board).

    Anyone who's in doubt, ask yourself - why would they spend all the time & money engaging with NASDAQ to launch OB's only to backtrack & provide IS again?

    They rushed out buy orders to help plaster over the cracks of large spreads & allow limited exits for those most desperate, in a time of unprecedented uncertainty, but the medium/long term plan remains the same. If they feel the market needs support, which the current evidence suggests it does, then the most likely response will be some sort of promotion &/or dividend increase to help encourage liquidity.

    I'm generally positive about the future direction & prospects but have some concerns about the competence, professionalism & ability of the management to address traders genuine concerns & the potential for serious longer term reputational damage that their often "tin ear" approach can cause to the platform.



  • I believe Mike and ocs on another thread have hit it.
    It is all about sentiment - confidence and uncertainty.

    There is no confidence in investing in uncertain times.

    The good thing is there wont be much of a break until next season begins.

    But we need the crowds. The fans make the sport. We have to hope govts will allow crowds at matches asap. But I am not sure if this will be at start of next season or not.

    Once people are satisfied things are back to normal, expectations will be aligned for growth and we will see a huge rally. Until then we have to expect things to be stagnant, even fall further but hopefully not too much.

    We can't bitch at FI for this.

    I would expect all the clubs and players will have a lot more respect and appreciation for their fans after this. Long term it may be a good thing.



  • @Geronimo159387 said in Seeing Things Differently (Case For The Defence):

    @Metropolis said in Seeing Things Differently (Case For The Defence):

    Long term, I now suggest to you that IS will be reinstated by FI when the time is right and a valid lesson will have been learnt.

    Whilst I agree with most of your thoughtful & balanced post I would just caution about the potential return of (FI backed) IS. That boat has sailed I'm afraid & there's virtually no chance of it returning.

    This is where I disagree. I'm happy to admit I'm wrong in 6-9 months time if there is still no (FI backed) IS.

    I'm holding back on criticising FI at present until this is clear and think at this time we can only give them the benefit of the doubt.

    What makes you so certain they will not reinstate IS? They have said previously its a crucial part of the market and Adam himself has reassured us it would still exist. Going back on their word will likely damage their reputation and confidence. Given the circumstances, its understandable though.

    The OBs are to fill the void. So FI will likely offer a 40-50% IS and allow bids in between. Encourage trading but always have a base value provided.



  • @Metropolis said in Seeing Things Differently (Case For The Defence):

    What makes you so certain they will not reinstate IS?

    The amount of time, money & management capital invested into NASDAQ providing OB's which will negate the need for IS, they will then use market makers to provide liquidity, as & when necessary (paid for with a cut of the extra 2% buyers tax that starts next month) which is why I think, even though it's so clearly going to damage future growth, it's being forced through as a necessary evil.

    Basically the benefits of OB's & MM's are seen as far greater than the cost to future growth of a buyer's tax & being seen as betraying the promise of continued IS, which IMHO is probably correct, though I still don't think it's been handled well, using CV as cover to implement it is very poor judgement IMO (resulting in all the current dissatisfaction & reputational damage that a perceived betrayal will rightly generate).

    FI have a fantastic, potentially world beating product (that's heading in the right general direction) but being run by distinctly average management (who had a great idea but have been overtaken by the product growth) that struggle to competently run it currently, so I worry about their ability to manage future growth & direction.



  • @Metropolis I just don't see how, from a functional pov, you can have IS and full OB at the same time and for that reason alone I don't think it is coming back nor do I have that in mind when planning and buying



  • @Geronimo159387 to be clear, what do you mean by market makers and what would their function be?

    My limited understanding is they would be managed by FI (possibly bots and humans working for FI) to fill gaps in the market and improve liquidity. So, offer an IS price where there isn't one already, level out existing bids/ offers and generally make the market move faster.

    If they do provide an IS via a MM then is this not the same principle as FI offering a base IS?



  • @Silver FI mentioned the bid zone being 60% and you can only place bids in that zone. I know this hasn't turned out to be correct currently though..



  • @Metropolis said in Seeing Things Differently (Case For The Defence):

    My limited understanding is they would be managed by FI (possibly bots and humans working for FI) to fill gaps in the market and improve liquidity. So, offer an IS price where there isn't one already, level out existing bids/ offers and generally make the market move faster.
    If they do provide an IS via a MM then is this not the same principle as FI offering a base IS?

    The exact mechanics aren't yet clear (& haven't been outlined by FI afaik) but I expect them to be trading on their own independent account, FI wouldn't discharge their own IS liability, only to take it back by directly supporting MM, so are likely to be totally independent IMHO but working along mutually agreed guidelines but as you say filling gaps, providing liquidity & being paid for doing it.

    Confidence & buyer demand will help liquidity return but FI are currently not helping that happen by heaping uncertainty & fear onto an already anxious market.



  • @Geronimo159387 OK, so the way I'm reading this is that it will likely provide a similar service to (FI backed) IS. Buying shares from traders when there isn't a seller, with a view to then selling on at a profit or purely to retain confidence in the market. Same principle and not overly concerned if that's the case.



  • some great points made above. for what its worth, i dont believe IS will come back. 2 years ago when i invested in this product, i thought the end goal will be to become a "proper" exchange, much like Betfair, and to eventually be bought out by a big player. i see no reason to change my view on this now.
    also.........yes the market is flat and a little boring now. but if you invested in traditional stocks and shares right now (or oil!), you'd be very happy with flat!



  • Ports are dying of slow death at the minute



  • Yes a great post, and very pragmatic. I generally agree with the sentiments.

    I've seen these 'depressive' periods in the FI community before, but FI always bounces back. This time it feels there is more of an impact due to:
    a) There's been a fundamental change in the platform, and
    b) This is the first big external economic test for FI.

    I personally believe FI will weather the storm. I was always anti-order books pretty much for the very reasons we're seeing now, but they are only half done, and FI have a ton of analysis at thier disposal that help them make sensible decisions. Ultimately it is their business they are trying to protect; although our ports are secondary to this, they know we need healthy trading to stick around. Without us, there would be no FI.

    So although I'm not a fan of the changes, I do trust them to make the decisions needed to get through what is likely to be a tough period. My portfolio is plummeting so much right now I can barely look at it, but I'm still well up on where I was when we hit the peak of the virus in April and any talk of football seemed fanciful. This time next month I anticipate we would have had further clarity from FI on future direction, maybe some nice incentives, and we will all be happy again.


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