Each month, I will be posting an analysis covering the price movements in players that were highlighted on the site from the previous month.
A lot can be learned from analysing players' price movements over time and so it should be interesting to see why players highlighted on the site increased or decreased in price in the 30 days that followed.
As mentioned in various blog posts, the players highlighted on the site are usually players who could rise in the short term (over the next 30 days) usually due to suiting an upcoming market trend. Most players are highlighted due to also being great longer term holds as blogs generally focus on younger players.
These monthly blogs will analyse the results from the previous month to allow 30 days to go by since the last player from this month was highlighted on the site.
April 2020 Results
A total of 37 players were highlighted on FIC throughout April. Since being highlighted, the average peak price of these players has been an impressive 10.08% and the average rise after 30 days in these players was a strong 5.07%.
8 of the 37 players have increased 10%+ and only 4 have dropped in price (Bamba dropped the most, 5.13% following the cancellation of Ligue 1).
The full spreadsheet showing the results from the players highlighted in April 2020 can be found here: https://docs.google.com/spreadsheets/d/1w0lauZdL5iW87qwwfUybF0j4gUk7228Hz57wQJOqHfM/edit#gid=0
In this time, the market has grown a huge amount and although this 5.07% increase after 30 days may not seem so great compared to some of the recent rises in Jadon Sancho, Trent Alexander-Arnold and Marcus Rashford, it is a considerably greater rise than the average increases we have seen in the lower end of the market (Below £3) which FIC predominantly attempts to find value in.
The introduction of the Matching Engine has caused a paradigm shift through which traders see value opportunities to profit in the market. The Matching Engine has dramatically decreased the spreads at the top end which has increased liquidity further in this area of the market creating greater opportunities to profit and caused the opposite effect on the lower end of the market.
This also had a significant impact on the April 2020 results and further information on what we can expect in regards to this is mentioned further below.
The impact of the Matching Engine on the Lower End of the Market
The spreads in the market increase considerably the lower down the market you go. This makes it difficult to trade in and out of lower priced players as you could be waiting months to find a buyer willing to purchase lower priced shares at a reasonable price or will have to instant sell at a very unfavourable spread.
Conversely, the top end of the market has hugely benefited from the decreased spreads as traders can easily buy and sell premium players without it costing so much in commission resulting in much more liquidity in the top end of the market and less trading in the bottom end of the market.
Longer term, the best value players, in whichever area of the market are likely to be in demand the most and rise in price.
Over time value will prevail
There are many lower priced players who are also excellent value and strong longer term holds on Football Index, but in the short term - the focus of the market may remain on some of the most promising, value, premium players.
The growing anticipation of a dividend increase will also help the top end of the market grow further in the short term and of course many players at the top end are still great value.
Ultimately, there is value in hundreds of players throughout the market at all prices and with extensive research and continual analysis into price movements throughout the market, Football Index Club will be picking many great value players over the upcoming days, weeks, months and years.