Buy Commission and 1st October



  • Does the buy commission come into effect on the 1st October and what is the other change on that date? The order books???



  • Are we predicting another crash when it comes through or due to it apparently being an artificial crash will it not be as heavy this time round?



  • Being only with FI for three months I found it challenging to say the least on Shit yourself Sunday

    Not sure if my ticker could take that again !!



  • @NewUser600411 said in Buy Commission and 1st October:

    Are we predicting another crash when it comes through or due to it apparently being an artificial crash will it not be as heavy this time round?

    Why would commission on bids cause a market crash?



  • @trig the commission on bids should encourage more people to accept offers even though it may cost them slightly more for two reasons, they get the shares instantly and the mentality of paying commission.



  • @Black-Wolf I don't really follow that. Sure, if the spreads were small but I don't see how the introduction of a 2% bid comm is going to incentivise someone to lift an offer 20/30/40% higher than the bid. More likely is that they don't bid, or just bid lower to compensate for the 2% comm.



  • @Columbia oh yeah of course where spreads are huge people will always bid rather than buy. I meant rhe ones with tighter spreads sorry



  • I hope they don't bring it in. Its just another complication and drain on peoples funds at a time of great uncertainty/volatility. Its the last thing anyone needs at this particular moment in time.



  • Paying 2% commission on a sale which has hopefully earned some money (or at least offered the prospect of doing so) whilst being held in cap app or dividends seems reasonable. Yet paying 2% just for the privileged of buying it in the first place, albeit at a discount via a buy offer, is simply ridiculous, especially when those very buy offers are EFFECTIVELY THE CURRENT MARKET PRICE it's just madness to introduce a "buyer tax" in the current market conditions.

    The effect will be to reduce market liquidity even further as buyers quite correctly sit on their hands & ask why should I buy a player when I will immediately be 2% worse off, if I sit on my cash I will be better off? As if FI haven't demolished market sentiment enough recently with their mismanagement of the platform this is simply the latest example of ill thought out, self inflicted damage that will provide more evidence (as if that was necessary) that they don't understand trader mentality, market sentiment or how the product actually operates. The sooner the idea is scrapped the better, as it hasn't got a single benefit to recommend it.



  • @Geronimo159387 it is pretty hard to fathom or justify at a time when FI have absolved themselves of the huge liability of IS.

    It may be that it lowers what people are willing to bid, it may be that where spreads are tight, the idea would be to just 'buy now'. So I can see how it may boost liquidity in some instances, but that doesnt change the fact that it smacks of greed from FI.

    I suppose we can only wait to see whether that perceived greed is offset in some way by hugely generous dividend increases further down the line.



  • @MickTurbo said in Buy Commission and 1st October:

    There may or may not be a sound business case for increasing the commission take (a buyer tax still remains a terrible idea though), impossible for us to know without seeing the internal revenue streams, but given the fragile state of the current market & lack of available demand the only certainty is that introducing it now will further damage that weak demand & market sentiment. FI could probably reasonably argue that in a booming market with tight spreads an extra 2% might be both justified & absorbed but we are not at that point (largely as a result of FI's own inept mismanagement).

    Just like the failed insufficient 1st dividend review killed the market sentiment this will do the same, ironically any experienced trader can & is telling them that in advance so if they carry on regardless they are simply proving their unsuitability to be running the platform. Stumbling from one self inflicted crisis to the next could be seen as bad luck & an important learning experience in the early days but continuing to make exactly the same mistakes, damaging the platform & it's reputation along the way, even after being warned in advance, just confirms that the current senior management need to replaced for the long term benefit of the product.



  • @MikeWagner use your head, was obviously referring to order book system



  • @Geronimo159387 its exactly how many other markets do it by charging a fee on every single transaction but the 2% is higher than most of those but then they dont tend to offer daily dividends payouts or even any dividends at all. FI wants to be like these crypto and alternative asset classes and they seem to be adopting their structure in the process



  • @Black-Wolf said in Buy Commission and 1st October:

    FI wants to be like these crypto and alternative asset classes

    Often structured as a "processing fee" or "stamp duty" but it remains the case that a buyers tax reduces the impact of demand to in this case 98% of it's effectiveness. Given the state of the current market hands up all those that think further reducing demand (in the journey towards £1bn) is a good idea?? I rest my case.



  • @Geronimo159387 oh i agree and id rather not have it im just saying i can see where their thinking was behind it



  • @Black-Wolf said in Buy Commission and 1st October:

    im just saying i can see where their thinking was behind it

    I think you're being very generous to assume anyone at FI has actually thought about this & it's implications but fair play
    .



  • Agree with a lot that’s been said. 👆🏼

    Demand drives market growth. Putting a commission on the buyer reduces our willingness to invest and therefore FIs ambition to scale up.



  • They should delay the 2% bid commission until 2021. Now is not a good time to introduce it.



  • FI are spending an ever increasing amount on dividends, see the 700k payout at the weekend, so they probably need to increase the commission take. By my incredibly rough (possibly wrong!) guesswork to cover the cost of last weeks dividends maybe half the shares in existence had to be traded, I doubt this happened.



  • @Black-Wolf said in Buy Commission and 1st October:

    @trig the commission on bids should encourage more people to accept offers even though it may cost them slightly more for two reasons, they get the shares instantly and the mentality of paying commission.

    This was also my assumption for why FI wanted to add commission on bids.

    I think FI want prices to be high, dividends give each player credibility, but I think most people are attracted to capital appreciation. A big part of FI's marketing is 'player joins £10 club rocket emoji'. They don't want to be known as a penny stocks platform, and the higher prices are, the more they make in commission when that player is sold.

    So they incentivise people to buy now, as this helps to raise prices, but also add a bidding system to enable trading, but knowing this will help keep prices low, they take a 2% almost as a little compensation for themselves for it staying low.

    I'm not against 2% on bids as I think it will help shift some power back to sellers, which will help liquidity and traders.


Log in to reply