FIC Weekly 17.08.20

Today's FIC is packed full of short bursts of information and a general summary of where we are at with Football Index at the moment.

Apologies for the delay in getting this week's update out. Yesterday I comletely forgot that it was Sunday and that the FIC weekly was due. The evening, european games may have played a part in this but fortunately I remembered today and there is a lot to go over below!

I have also been busy this weekend finding more value players to post on the site (Coming soon) and completing my PFSA Level 2 Scouting Qualification. Gaining more experience in scouting via a professional qualification should hopefully improve the player analysis on FIC even further.

The European Tournaments

There have been some really exciting games this week and there have been plenty of big dividend returns showing the value of many players on Football Index.

With just the Semi-Finals of the Champions League, one semi-final in the Europa League and then the final of both tournaments - it may be too late to start buying players for these games.

As we have seen with price movements in Manchester City and Manchester United players, once players no longer have an upcoming chance of earning matchday dividends, their spreads widen as demand falls.

Spreads 24 hours after each Manchester team was knocked out of their relevant European Tournament

As we can from the graph above, spreads tends to widen considerably on players once their team has been knocked out of a European tournament.

The possibility of earning dividends and capital appreciation on the majority of players in these tournaments is leading to increased demand. However, such demand is likely to be only prevalent.

The impact of recency bias is currently huge and more can be found on this pyschological bias here.

TOTM Dividends

Team of the month dividends are an additional reason that some Champions and Europa League players currently have tighter spreads.

As we can many of the players in the current standings are still in with a chance of earning Team of the Month dividends. However, again the potential widening of spreads, makes many of these players poor short term holds. The dividends and capital appreciation earned will only offset the potential losses caused by widening spreads on a very few amount of players.

Trading within spreads

At the moment, the market undoubtedly appears much flatter than usual. Overall, there are less players increasing in price. But, there are often wide fluctuations in player's spreads and these can be taken advantage of.

Dimitri Payet spread has tightened recently

By keeping an eye on spreads and putting bids in at much below market prices to only sell once spreads tigthen again, we can be very profitable.

The demand for players is largely depending on how soon players will be returning to action. In addition to players playing in the current European tournaments, Ligue 1 players now have tighter spreads than players from other leagues.

Payet's tightened spread is partly due to the 5X IPD promotion, but it is likely we will continue to see spreads tighten on players who have 20%+ spreads that have a real chance of earning matchday dividends during the 2020/2021 season.

There are many valuable players from Serie A that currently have wide spreads in particular.

Ligue 1 Return?

Ligue 1 is currently set to return this Friday with Marseille V Saint-Etienne. However, after already having a number of cases in recent weeks, Marseille have announced that they have a further 3 suspected cases within their squad.

France Covid-19 cases have increased considerably recently

Therefore, there is no guarantee that Ligue 1 will return as expected. This could possibly impact some short term holds that could have benefited from the 5X IPD promotion in particular.

Though, for now, the possibility of Ligue 1's return being postponed is only speculative.

What's coming up?

Overall, at the moment, there are a number of traders unhappy with the current wide spreads and the inability to sell players close to market prices.

Such negativity is understandable given the changes in the platform in recent months and the current wide spreads that are making it more difficult to sell players at market prices.

However, now is possibly one of the worst times to withdraw from Football Index as we are in a strange period between what was a very fluid, exciting but unpredictable market and what should hopefully become a more established, stable and better functioning platform with liquidity throughout.

The temporary measures such as promotions are currently holding the platform up, but such promotions are unsustainable and it is likely the fundamental changes that we will soon see will have a hugely positive impact on trader's confidence and create the much needed liquidity.

With the introduction of Phase 2 of the Matching Engine, NASDAQ technology and the biggest marketing campaign in Football Index's career we could see a lot of growth towards the end of this year.


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