Updated: Feb 3, 2020
Dividends are likely to increase
On Friday October 18th Football Index are delivering a Dividend Policy Review at 18:00 GMT. There will be a market downtime of half an hour to allow traders to digest the information, with the market reopening at 18:30 GMT.
Football Index have said ' We’ve seen exciting growth on the Index in 2019. To recognise this rapid growth of the market in recent months, we want to ensure that Dividend returns remain a great incentive for all Traders.'
I can not say for certain yet if dividends are going to increase or by how much.
However, this wording above from Football Index alongside the very positive tweets recently from Adam Cole, CEO of Football Index, suggest a dividend increase is just around the corner.
How will the market react?
Dividends increasing is possibly the best thing to happen for traders on Football Index. It ultimately means that our betting odds are being improved and shares have potential to earn you even more dividends.
As players which are likely to return dividends have potential to earn you even more in dividends, they become more valuable leading to an increase in demand and therefore price.
Many well-known high PB scoring players have already increased in price based on speculation of this increase due to traders wanting to buy players early which could have an improved, potential percentage dividend yield.
It is likely in the short term up until and for the few weeks / months after the dividend announcement, the focus of traders will shift towards players which are likely to offer the best returns in dividends based on previous dividend wins and high PB scores to attract the demand of traders.
Arguably, the focus of traders should always be on players which can offer the best return in dividends, relative to price. However, in recent months we have seen a shift towards short term trading due to the incredible capital appreciation which can be acquired without a focus on dividends in the short-term.
Many traders will now be buying these strong, well known, PB players and will be looking to sell just before or after the dividend announcement to gain form this capital appreciation in the short term. I will be highlighting less obvious potential PB winners which could be very good value at their current price.
These high PB scoring players which are likely to increase considerably in the short-term due to the dividend announcement are likely to reach a price where they no longer become such good value. Until that point, it is likely they are worth buying, although, this will of course depend on how much dividends are increased by (Assuming they are increased).
Much like what happened after the last share split / dividend increase, once these players reach a price where they no longer become such good value - traders will then start to look elsewhere in the market to again find value. This is because as potential PB winners increase too much in price, their potential dividend yield falls and they become less valuable.
However, this may not be for many months and higher prices will impact younger players less (partly due to the 6 year long-term trade).
How to profit from the dividend announcement?
First of all, below you can see which types of players are likely to increase / decrease from the dividend announcement.
Strong PB players - high PB base players which also have the potential to be dividend winners / players who hit very high peak PB scores reasonably regularly
The demand for players with high PB scores will be amplified if they also have any of the following characteristics (the more the better):
Likely to transfer to a better team
Playing at EURO 2020
Currently at a low price
Playing for a team in Champions League / Europa League (especially a strong team likely to enter the later stages)
Players with limited chances of playing PB eligible games such as players in non-pb leagues, not playing at EURO 2020, not playing any European tournament
Players not regularly starting for their team
Players unlikely to gain a transfer to a PB league with limited chances of playing in PB eligible games
The prospect of a Performance Buzz (PB) dividend increase is most attractive to traders which is why the above is focusing on a PB dividend increase becoming a reality.
I will be highlighting plenty of PB players this week which would look very good value based on their previous PB scores relative to their current price especially if there was to be a PB dividend increase. This will give you the opportunity to buy players which are likely to have a strong percentage dividend yield - very early.
The extent to which player's prices will be affected by the announcement will depend on how much PB / IPD / MB dividends are increased by.
However, we can be very confident that there are very exciting times ahead for Football Index and so there has never been a better time to be a Football Index Club member to gain full advantage of the growth in the platform.