Sell Orders/Order Books - Poll (but read first)


    There are two ways FI can introduce sell orders.

    1. Full OB system, users can set sell orders at whatever value they like, above or below current value, above or below other peoples highest bids/sells etc

    This is true OB where the market therefore set the price of a player - sell value is the highest bid, buy value is the lowest sell order.

    The value of a player becomes irrelevant but most platforms would then show the MID (between the spreads) as current value. Some do it on the highest bid, most recent price paid etc...

    For this system to work, FI would have to remove themselves from the market. They could no longer sell shares as effectively they would be undermining the sellers who list above current value.

    The main advantage of fair market is a truer reflection of demand vs supply. At the moment it's a buyers market, they can bid below value and pick up cheap shares... for prices to go up we need a swathe of buys from market... which with volume x current price takes huge amounts of capital. This is why the market is as flat as its ever been, money is going in and out, but mostly below market price meaning no price movement. Allowing unlimited sell orders means the holders can skip the rigmarole of volume of purchases pushing price up penny by penny, and skip ahead to what they really value the player at.

    The main issues I see are how FI can transition to this model. There are many players who are very close to their IPO price, meaning there's very few shares in the market. Whilst others have hundreds of thousands/millions of shares. As demand changes, the imbalance of shares will cause chaos. Imagine a £1 player near to IPO price joins Man Utd and is the next big star and there is only 1800 shares? Whereas an ageing Neymar on his way back to Brazil, or even worse, Serie A.. has a million of shares knocking around that no one wants?

    How could FI introduce new shares without undermining the holders who bought early and have slapped a high sell order in play? The only way I can see (but please offer information if you have ideas, experience) is to share split individual players. This is possible, they would also have to split the dividends on that player though. So over time you could end up with a market that has hundreds of different dividend tables in play. I just don't see the product wanting to go there.

    The other issue, less about mechanics more about business model. Will FI really want to give up such a lucrative income stream or selling shares at full price that they now never have to buy back? It's zero cost to them!

    1. restrict the sell orders to between the current price and the highest bid.

    This would be more of a haggling tool than a means of allowing the market to drive price based on supply/demand. But its easy and quick to implement and understand. It allows FI to continue selling shares which will always address the issue of imbalance and creating more shares for in-demand players.

    Why will it increase liquidity? Others have mentioned it... but its really just an accelerant. Atm for example I have players I want to sell but the buy orders are nowhere close. However, the people who form the top 300 bids currently will have genuine belief they have a chance of a successful bid, simply by virtue of being top bid (and of course some desperate sellers will bite). I have to keep waiting while weak sellers scoop up the bids, and eventually (hopefully) the bids will creep up to a more acceptable level. But when sell orders come in... I, and other sellers, can speed the process up by showing the buyers exactly what the acceptable level is. They probably still undercut, but more likely to be in the ballpark... and both sides can squeeze the margin closer together in true form of haggling. At the moment the guy is offering 50p on a 70p player and my mouth is taped shut, when I want to give him a nudge and wink towards 60p.

    Not much else to say on this way of implementing sell orders, because it is a lot simpler and slips in neatly with the current model. (which is why I think its the course they will take).

  • going by the limited buy orders, i cant see them letting us loose...

    if so they must let us loose on the other end too.

    I find it very strange and frustrating that we cant bid below a certain amount- loads of players with no bids, id happily be a market maker for some of those players but no way am i starting the bid a 60%

  • Almost certainly number two. Their ability to issue new shares at full market price and at 100% profit, coupled with the necessity for the £1 player mentioned who goes to Utd and becomes a star to be able to naturally appreciate to the level we all know he'd reach are surely enough to make this a no brainer. Even more so given that there are restrictions already in evidence on where we can and can't pitch our buy orders

  • @MickTurbo yes exactly my thoughts. was saying to baydog… which company in their right mind gives up the golden goose of a product they make 100% margin on... zero production costs, zero overhead, zero liability.

    @Geronimo159387 is switched on though from what I've seen... voted for full OB. Care to give us some thoughts on a) how its possible with share imbalance, b) why FI would give up the licence to print money?

    I guess you could argue the second part on increased commission at higher prices... more volatility, more trading etc.

  • @Coriolanus

    I believe they will go with limited, for all the reasons already explained, but I would prefer full OB's, as they will lead to a "cleaner" market price, based on actual demand & supply. Any share imbalance could be addressed through (existing) player specific IPO's where "shadow auctions" allow bids for price/quantity against a set number of "new" futures to be issued. NASDAQ will have plenty of experience in this kind of share issuing, so why not capitalise on their expertise?

  • If we have a properly run order book FI can't really issue new shares in existing listed players because if demand outstrips supply this is what would push prices up or if they did issue new shares existing holders should get some sort of recompense for share dilution ? If IS is finished with then FI issueing shares should also be finished with except for IPO's

  • @Geronimo159387 ha just discussing auction atm in text.

    issue I see and ill use same example we are discussing.

    Eduard Lowen - a cheap player that at times Baydog and I have both owned 5000+ shares in. With a full OB system... we would have considerable power to set his price.

    A few weeks ago he was I dunno… 40pish, scored the first goal in the first kick off within the PB deadline. People bought thousands of shares at market value... but we see a 3p rise. nothing to shout about. Then after the game his IS was back to around 17p, something derogatory!

    If that had happened in a full OB world - we would have set his price at maybe 50/60p and people would have bought.

    Lets say he hits real form (this is going hypothetical now...) and a big club is sniffing cos hes out of contract … baydog and I now slap a £1 price tag on him.

    If FI come along and auction new shares … that massively undermines our power. We would be diluted, and probably end up being given more shares we don't want or need... more in circulation just makes it harder to sell.... so it would fuck us pretty much.

    Theyd have to come up with some very strict rules as to what would trigger a share release.

    I think it would become incredibly messy.

  • @NewUser550313 said in Sell Orders/Order Books - Poll (but read first):

    if they did issue new shares existing holders should get some sort of recompense for share dilution ?

    True but not an insurmountable problem, it happens all the time in the world of finance & NASDAQ have all the necessary expertise for a professional & competent job. Now if FI were to attempt such an ambitious project on their own I would have SERIOUS reservations, as they struggle with just paying out the correct dividends!

  • They have to limit them or player valuations could do anything and make it very volatile especially at this moment in time. If the bid zone remains 60% then sell orders could keep pushing that down as everyone under cuts each other.

    The current mood amongst traders would see prices plummet and create a Bear market.

  • @Coriolanus said in Sell Orders/Order Books - Poll (but read first):

    I think it would become incredibly messy.

    Not necessarily; to take your example to the extreme where a handful of owners look to "corner the market" FI could instruct market makers to buy up the existing supply, so you get paid what you're asking, & then once they controlled the supply effectively vote to have an new share issue. Plenty of real world examples where "activist" shareholders try to hold boards to ransom, for example in hostile take overs, almost always solved by buying them out at a price that the market dictates, which brings us nicely back to supply & demand & greed conquering fear.

    This is exactly what used to happen under the old IPO system where bots & FFF used to try & buy up all the available supply at or just above the IPO price & quickly flip it (often for huge profits) onto the unsuspecting regular buyers who had researched the player & thought he looked cheap (at the IPO price) but were duped into paying a far higher price.

    Partly due to market manipulation, poor IT infrastructure & desperately poor IPO structure but the result was a few made huge profits by ripping off the masses.

    Was this a really healthy way to issue futures? or allow the market to behave?

  • @Black-Wolf Agree. Can't see FI taking that path. Personally, however, I like to trade, so volatility is necessary for me... the wilder it is the more I can profit. Limited sell orders wouldnt interest me, other than a quicker way to get money out.

    I want unlimited, but 99% certain we will get limited.

  • @Coriolanus the fear of an open ended market will have everyone wanting a cash balance only because it will be like entering a whole new market and the prices today will be completely unrelated to the prices on an open market.

    FI’s misunderstanding of traders and their own market may mean theres every chance for either style being implemented.

  • @Black-Wolf said in Sell Orders/Order Books - Poll (but read first):

    FI’s misunderstanding of traders and their own market may mean theres every chance for either style being implemented.

    Which is why I'm reassured that NASDAQ are involved as their professionalism, competence & experience will help avoid most of the many potential pitfalls IMHO.

  • @Geronimo159387 the NASDAQ brand association could be a bit misleading. I think FI are essentially just paying a fee to use their tech. I can't really see NASDAQ becoming involved in decision making. Maybe some support maintenance on configuring and supporting the infrastructure. But it will be entirely FI who decide what capability users will have. (imo)

  • @Geronimo159387 im not sure Nasdaq have been involved in this matching engine when listening to the podcast with AC and akash. Nasdaq are still to come on board with their format thats why i dont really want sell orders or any more major changes until Nasdaq introduce their system as its to much upheaval to often

  • @Coriolanus said in Sell Orders/Order Books - Poll (but read first):

    I think FI are essentially just paying a fee to use their tech. I can't really see NASDAQ becoming involved in decision making.

    Largely true but they will advise on how it works & what to avoid but more importantly won't want their own reputation trashed by it being misused.

  • And just like that … It seems polls have been removed? did @Dalian-Smyth complain because I raised a poll?

  • @Coriolanus personally, I would rather the order book system was never implemented. FI was perfectly fine before the ‘matching engine’ was introduced. For me, FI have removed all risk from themselves and left us to fight for what seems ‘scraps’. Hardly anyone buys full price and most buyers are low balling most price tags. To sum up, order books stink.

  • @Sol haha I whole heartedly agree but think ive taken enough heat for moaning about whats happened. trying to think forward … tbh these two methods … im not really worried about the pros and cons... more looking for whether or not its even feasible to have open OB.

    I tried to raise it on twitter last week but the response I got was "of course it will be unrestricted, that's what OB is" by some pleb whos probably not given a moments thought as to how FI would need to change all the mechanics for it to happen... but also that theyd be giving up the worlds easiest revenue stream. (maybe joint easiest with those people that sell the naming rights to parts of space!)

  • @Sol said in Sell Orders/Order Books - Poll (but read first):

    To sum up, order books stink.

    Whilst I do symathise with your predicament, please give it time & you will hopefully see much improvement. We are suffering a buyers market currently but OB's aren't to blame; CV, uncertainty about platform direction, lack of management communication or decisiveness, perceived IS betrayal have all destroyed market confidence. Whilst using the lull in football to rush out OB's might have seemed a great idea at the time restricting it to only the buy side (totally understandable to not want to entirely launch full OB's) has lead to a lobsided swing of market power, leaving sellers feeling understandably frustrated & helpless.

    A healthy, growing market needs both buyers & sellers to wield similar power but also relies on confidence & certainty about the future which are currently all in short supply, once full OB's are here & confidence returns the platform will look an entirely different place but it might be several more months before we see it IMO.

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