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There has been lots of discussion on social media lately about the spreads. For newer readers the “spread” is the difference between the buy price and the Instant Sell price and this does appear to be widening for many players.

This makes the market tougher for all traders as when we make a bad trade (or anytime the trade doesn’t go our way) we take a bigger hit if we want to get out of it. 

But, it particularly hits very short term traders (flippers) who want to be in and out with a quick buck. And it’s hard for traders who hold very high priced players too as the comfort blanket of being able to quickly and easily liquidate much of the large sums of money locked up in them is gradually taken away.

Many traders don’t understand why FI would do this since FI directly profit every time we sell. There is an incentive there for them to make trading as easy as possible.

However, if you listen to what Adam Cole, CEO, has said over the years, Instant Sell is also a massive downside risk and liability on FI’s balance sheet. Everytime we use Instant Sell, FI are paying back real money. That’s a burden, as is keeping that much cash on hand to pay people back.

The reason IS exists at all was to faciliate a young market. Without it, FI would probably have never really gotten going because it’s only that ability to Instant Sell easily that convinced many to part with their cash.

We must fully expect FI’s long term goal to be to ween us off Instant Sell and encourage us to sell to other traders. Eventually, Order Books may carry some of the weight here (check my Guides section if you don’t know what an Order Book is or how it might work on FI).

This may be shocking if the only market you have ever traded in is FI. But actually, well functioning markets do not over rely on a background moneyman buying up all the stocks that everyone suddenly doesn’t want at reasonable rates. Who would do that normally unless they were offering extremely punishing prices to desperate people?

If anything, it surprises me that FI are actually this generous when it comes to willingly buying up unwanted shares. Although as the market was growing, there was good reason for them to be. 

I actually find it reassuring that FI are taking sensible steps to manage their risk and get their balance sheet under control. I am confident with trading but my biggest worry about my money being in FI is that something untoward happened at FI towers one day. 

So, I expect I will always welcome it when they take sensible risk management steps as a company. That is actually good for us traders, too.

Not everyone is going to agree with me on this which is fine. If we put ourselves in FI’s shoes though, I don’t think even the biggest of social media “stop the spread!” justice campaigns will stop this. It’s a clear long term objective of FI, it makes a lot of sense from a business perspective, and I don’t see it changing. 

What we can do as traders is adapt appropriately.

My observation is that spreads typically increase when FI believe a player is high risk because of 1 or more of the following reasons:

a) They have risen sharply in value recently. This makes sense as what goes up quickly tends to come down quickly too.

b) The players prospects of potential dividend returns are not as good as many on social media seem to believe. 

c) The player is being pumped/discussed heavily on social media (surely they must monitor this).

d) The player is reaching a very high price. 

In short, FI increase spreads when they fear a player could be rapidly sold and they don’t want to take all of the hit. Use that information. If you see a big spread, think about why FI would have put it there and decide if you agree with their assessment or not.

Overall, I think good traders will have to get used to the idea that an Instant Sell is a last resort. There is such a thing as a good Instant Sell, if you judge the hit to be worth taking because you think you are reacting quickly before an inevitable drop. 

But I generally consider an Instant Sell to be a failure. It probably means I missed my chance to sell to market at the right moment. Or it could just mean that I got unlucky with an injury or similar and I lost my bet.

That’s ok and it’s not unfair. FI don’t owe me a profit. Like any market as it matures, it will toughen up over time as more users join and it gets more competitive. 

Instant Sells becoming gradually less generous is just one more reason we have to keep getting better and better at trading to keep making big profits.

As this is the last public post before Monday, final reminder that this is the last chance to secure the old membership price for the whole season before it goes up permanently.

Until Monday you can still become a member for just over £2 per week which is well worth it particularly if you don't have time to review the stats across all 5 leagues every week to protect your investment and highlight the strongest performers to invest in.

It goes up to around £3 per week from Monday!

Risers

FIFA Wonderkids

Nobody who has been around on FI very long will be surprised that FIFA wonderkids are rising in value because they got a mention as the new game is about to be released. The same thing happens with Football Manager.

It’s both crackers and makes perfect sense at the same time.

It’s crackers because FIFA has almost no relation to the real quality of players on FI. If you are looking for really good players for FI purposes, you will have as much luck selecting player names by firing a clown out of a cannon into a giant Twister board full of player names and buying whichever one it hits.

At the same time, if other traders are going to buy them then you’ve made a profit anyway and who cares why?

If engaging in this sort of trading though it still pays to know which ones are actually good or not. 

The best traders should know this anyway and not need FIFA to tell them.

If they are FI no hopers, you may want to be dropping that trade sharpish because you can bet the smart money will be before too long.

If on the other hand you have checked out the stats, the path to the first team and overall trend fit and you think the player has real potential, they may well look cheap even after paying the “FIFA wonderkid premium”. 

So ultimately I don’t think there is anything wrong with this sort of trading provided you have not drunk the kool-aid and have a good understanding of the player’s real FI potential.

Fallers

Maximilian Arnold

This was one of those social media debates about whether he is good or not that I tend to avoid like the plague. 

In a month where he has flown from 65p to £1 he has now started falling again after a social media outcry about him being not worth the money.

As much as anything, it’s an interesting example of how social media does make or break prices and how susceptible people are to this kind of thing. People do like the comfort blanket of seeing “their” player being talked about positively, and hate to see them being trodden on.

My advice is to just to make up your own mind and have your own system for evaluating a player. 

Even in my members area where I discuss the fortunes of dozens or even hundreds of players each week and rate them, I still expect and encourage members to read my analysis and then make up their own mind rather than just following along blind. And the members who get the most from the site definitely seem to do that.

So what’s my view on Arnold? 

If spotting him at 60p a month ago you can probably make a case that if all the stars aligned he’d be capable of a decent score on a very good day for him. He’s got some decent involvement stats for a smaller club player, and some good secondary stats like long passes, interceptions and recoveries. 

He gets some shots, but typically they are long range low percentage efforts so his goal threat is low. The best feature is that in the last 3 games he has created plenty of chances and whilst he hasn’t had any assists, some should be on the way.

So he’s reasonable but I would also say any claims of “performance beast” are well wide of the mark. 

At 60p it would be a fair punt if you wanted to bet on him getting a win, some attention, and then taking a profit if he crept towards 75p or more. 

Would it be the sort of thing I go for? Not really, and certainly not above 75p. 

He doesn’t have a particularly exciting trend fit and if the stars aligned and he did win he would be unlikely to win again soon and would likely lose momentum.

 

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