What’s the thinking behind the buy price algorithm?

  • Now that I’ve got my head around it a bit more I’m wondering what the thinking was behind using the 300 lowest offers to set the buy price? Would it not have been better to either use the lowest 1000-2000 offers or to just use the average price of all offers?

    As using this algorithm is going to make the price incredibly volatile; almost too volatile to be honest. Even when they bring in the ability to see the depth (hopefully something they’ll bring in pretty damn quick) you’ll have a clearer picture of what your player is worth (in many cases a lot more than the current buy price that is showing) but it will be so up and down.

    Currently if your players value is, say £5 and is being determined by the lowest 300. The next 300 may value him at £6, who knows.

    This also makes me think that with the buy price being set by the lowest offers, then buying at market price will potentially see you get a huge bargain as once those 300 lowest offer shift, the buy price will go up and in some cases fly up!

    I guess I’ve got the understanding of this right?

    What’s others views on the strange decision to use the 300 lowest offers?

  • @Erased-Citizen Yes you are understanding it correctly, personally i think they went 300 just to match with the ME which is just as volatile but is not linked to the port value that we see so now one really noticed or minded. But now its up there in green moving about all over the place people have gone a bit crazy.

    To be fair its at FI discretion to change this as they can with the bid/offer zones its one of the levers they have to pull, but i am not sure if they will, depends how much noise people make about it i guess.

    One thing is for sure though now that we have these OBs this coming marketing surge needs to be successful in order to pull in enough people to be able to support both sides of the market like this. Roll on Nasdaq and some institutional investors please, because your average bloke down the pub with a £20 note every week ain't gonna cut it.

    Incidentally how did your port fair yesterday, are you still in the green?

  • @Chris-C My port went from being 11.2% up to 4.4% up but then fell again this morning to just 3.1% up. However it’s now showing small signs of growth and currently sits at 4.2%.

    Compared to others I didn’t fair too bad which gave me confidence that I have a good and diverse port of dividend winners.

    How did you fair?

  • Yeah not great, my all time profit dropped from about 52% to about 42% without much of a recovery to speak off so far, but i remain hopeful of a comeback.
    Hands down yesterday was by far (like 3 or 4 times bigger then the covid dip) the single biggest 24 hour loss in value i have had in over a year or so of being on the index leaving me back to where i was just before FI dropped GKs on us in that div review, which does kinda suck.

    Still could have been worse!

    Glad to see that you are still hanging in there in positive territory.

  • @Chris-C Sounds like overall you’ve not come out of it too bad either with a 10% hit. I think we will see some big rises once action gets fully underway and especially with the x5 IPDs still in place for a couple more weeks. Thing are gonna be pretty volatile though until they ideally change the buy price algorithm or at least allow us to see the depth. I’d prefer the former as if not your port value is still going to be largely incorrect most of the time as your real value will be higher than the buy price in truth.

  • @Erased-Citizen

    I think being able to see the depth will be a game changer,

    Short term, yes some nice div hauls over the next few days and weeks would be most welcome.

    Got some sancho and pog divs (fingers crossed) coming tomorrow so that will be nice, if some of my players can do a madness in the PB stakes over the weekend i will feel much happier i think. Thankfully I don't really trade for CA to much, just for divs and i got 1 year and 9 months before my oldest shares start to expire so plenty of time to get a decent exit after this shit storm has ended and plenty of time to earn some dividends in the process, I have no doubt that the index will recover and things will chill out a bit, football back on will definitely help with that.

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