Insight 16: Dark before dawn? (Football Index)

Updated: Dec 13, 2020

Dear reader,

I listened and reflected on the feedback on our previous Football Index article. I have honestly tried hard to avoid anymore overly critical articles about F.I. (I actually thought that one was quite positive overall! Look at the buys I made... how the market has changed since!). Some of the points especially made by Hasselbanker are now ringing very true and we are seeing the affect of the new risk level. Seeing as now the wider FI community are now realising the issues and have reacted to them in the market, unfortunately we are still here wondering where the Index goes next? As much as this article starts out by pointing out some mistakes FI have made along the way- and starts with a typical Vespasianish blunt sentence- keep reading to see Vespasian's positive ideas for the way forward - the dawn of the new index.

It's a great article for anyone who needs a summary of the points that lead to this current state of the market and its another voice (in the growing social media crowd of voices doing the same) talking about how it gets fixed. I agree with Vespasian's solutions.

After reading many sides to the debate, I still believe in what I said last week:

Some other good examples I have noticed are : PB Man's twitter thread

and MDJ's recent blog article.

The more we all suggest sensible ideas to FI, the better. It is a growing product and they keep telling us they appreciate the feedback. Like it or not, it appears we are still the guinea pigs for the final product.

Going forwards, personally, I don't think its all doom and gloom. A while back, Vespasian gave us a good read about making money from volatility on order books. I'm excited for full order books where we will finally be able to bid and sell at what we want. I'm not sure the Index is quite ready for it, but I'm sure FI now know the steps they must take to get there. In the meantime, I've had to change my trading approach a couple of times recently, but I am still picking up small profits on players here and there to keep me ticking over instead of just sinking with the wide spread capital depreciation we are currently seeing. I will be sharing an update on my football trading from across Football Index, Footstock and Sorare portfolios soon.

Thanks for reading,



My Dog Ate My Homework Sir… by Vespasian

Football Index is in turmoil. I want to address some of the main problems, how they came about and what might be done to push forward.

I am going to make comparisons to Footstock, but this is not a Footstock vs Football Index post nor is it a Footstock advert. Many say the two can’t be compared and that they are totally different products but let’s not be silly; same industry, same sport, same customers and both have a trading platform where users buy and sell from each other.

The below statement was released as part of yet another great email this week from Footstock. Their monthly email is succinct and pertinent every time, with just enough humour and always touches on the most pressing concerns the community has been talking about that month. They are clear with their actions and reasoning and don’t hide what hasn’t/isn’t being done.

Here you can tell they have their finger to the pulse in the industry. This is 100% targeted comms and not a coincidence that they are talking about spreads and liquidity for the first time since I joined six months ago.

Released on a day where the phoney ‘King’ of the Index had no sell price, nor did many of the Index, Footstock can boast that more than 99% of players on their platform did have a sell price. And whilst spreads on FI are wider than the Grand Canyon, on Footstock they are quite narrow, especially at the top.

This isn’t to rub it in anyone’s face, but a lot of bleating from Football Index themselves and lots of its user base has been to stuff Covid down our throats like we should accept the current state of the Index is nobody’s fault and is just an unlucky run of circumstance. Using Covid in defence of every current problem and bad decision reminds me of turning up to Chemistry class to face my demon teacher and yet again not having done the homework, “My dog ate it Sir”.

Covid hasn’t stopped Footstock from continuing developments across the board; new staff, new contests, new mechanisms, new app, not to mention the user base, which largely overlaps Football Index, have continued to enjoy the product and trade actively throughout Covid and as a result market cap has risen significantly.

The other brief point I’d like to make before I move on to concentrate solely on Football Index is that Footstock runs an order book system and its users have no complaints about it. A change was made a month or so ago to tighten control of cards in circulation and since then prices have seen an upward projectory, especially those players in form, and the platform is generally quite stable. We can revisit why it works so well later in the article. For now the point is to state from the onset that Order Books can be successful in Football Index (if the conditions are right); it is not a doomed function that will always drive downward pressure.

Where Football Index problems began

It’s been a rocky road since February. In the months prior and up to February I was one of the top contributors to the Football Index Forum, I had just entered this website enterprise with Westy and Hasselbanker, I’d been on the Football Index Weekly podcast and was a growing commentator in the Football Index Twitter community. I was heavily invested in and loving Football Index and the social networks that went with it.

Trouble for me began as soon as Football Index ‘suspended’ IS during Covid. There were lots of merits for what they had done, and some saw it as a move to ‘save’ the company from mass panic. I didn’t have a major issue with it as such; but I’d have rather the company were brave, widened the spreads but effectively allow us to trade as normal, especially as they then released a great promo for double dividends and media madness. People couldn’t sell at the time and therefore couldn’t adjust strategy to enjoy the promotion. If you already held media players, great; if you didn’t and didn’t have large bankroll, you were stuffed and had to sit idly by while your PB players stunk and others were returning handsomely. This was poor management and probably the onset of negative sentiment.

Things became drastically worse when Football Index proceeded to introduce the Matching Engine (ME) and strip away Instant Sell (IS) for good, without ever giving customers a last chance to adapt their portfolio accordingly. It was only a month or so prior when Adam Cole in his January Q&A had said Instant Sell would not be removed before Order Books and even then, only when they were no longer necessary because the market could look after itself.

This was atrocious in my eyes and I began to complain publicly at this point and became something of a Football Index villain on both the Forum and Twitter. It’s interesting now to see the comments and panic from people who gave me such visceral at the time! Especially as nothing has changed except for dividends doubling.

ME was a buyer’s tool into a buyers’ market. Alarm bells were ringing at this point, especially when Adam Cole and Akash pat themselves on the back whilst admitting the concept was taken from inception to implementation in under eight weeks and came with all the usual tech issues of a poorly tested rush job. It becomes clear the management team are genuine clowns.

For their next act they introduced sell orders without any incentive alongside nor market depth. We were promised we would transition smoothly to Order Books (OB) with training, tutorials, hands on testing systems and plenty of information. They should have been rolled out at the appropriate time and with a juicy promotion to keep value and sentiment high at the time. Nail the first few weeks of true order books and fair market and the future would be easy.

Then we had ‘Black Sunday’ and for all their mistakes the Football Index world was about to sort itself out in what could have been a brutal few days of reality and price corrections. People in my Football Index circle were licking their lips! Finally, we have fair market and prices are correcting and we might be able to trade again. Only for Football Index to come in apply the stabilisers. In doing so, they have returned us to a flat market dropping every day and with each day that passes sentiment gets worse! A few moaners have become a full-scale rabble with pitch forks and the sternest of Football Index ‘defenders’ are begging for mercy in hysterics.

This weekend a powerful message has been sent to Football Index; Bruno scoring two goals and getting an assist with a strong PB score and MB in the bag all before the trading deadline for the day, yet his price went down 50p! Six months too late, the FI masses finally get it and now we are looking at Football Index's darkest hour.

Impact of no IS

Briefly some of the ways the lack of IS has impacted me and in my opinion many others too:

  • Buying bulk shares in cheaper players – without the knowledge I can sell back to house, the days of buying 5000/10,000 shares in a 30p player are long behind me. Listing the shares drops the price/stops the rise and triggers other buyers to lose interest and other holders to want to sell. You can see your margins disappear in an instant. Using a snap decision when to trigger IS, gave you complete control over how much profit or loss you were making and more importantly, you didn’t have to time the sell perfectly for when there was still demand in a little known player.

  • Transfer rumours – if the rumour doesn’t come to fruition you can just be left with a bad hold until the next transfer window at best, or perhaps longer.

  • Non-pb holds – same as above, the ‘FOMO’ simply won’t exist anymore. Holding a non-pb player and hoping for that one link to a decent PB team doesn't work as well as it once did *. I think you need the player to get a good move. If they don’t, you're looking at more money tied up earning nothing for a long time.

  • Putting 50k into a premium hold and treating it as a cash cow. The risk of not being able to sell when you want, if at all, means I am managing my risk and bankroll in a way I didn’t have to before. I’ve released huge sums in one session of IS lasting minutes before, in order to jump on opportunities both within and external to Football Index. I suspect now it would be weeks or months to release that kind of capital.

  • Same as above but portfolio in general – just how much money are we willing to tie up and risk without the comfort of being able to withdraw large sums for relatively small losses


This run of events has led us to a shameful position in the market with thousands of players now completely illiquid.

I am seeing a lot of misconception about liquidity among traders. The consensus is correct, that it is our biggest problem now. However, people are happy to band around the term without understanding it because the recommended solutions do not go hand-in-hand with liquidity.

Liquidity means high volume of activity in a market.

I have seen mention of:

  • Narrow the bid zone further.

  • Change the buy price to consider more shares or average of all the sell orders.

  • Only players bought at ‘buy now’ eligible for IPDs.

  • Rebate on ‘buy now’

  • Commission on bids

  • Bid depth

  • Nasdaq

  • Increasing IPD eligibility zone

  • Scrap expiry dates

All of these suggest a failure to accept that for the time being people want money out and buyers have all the power. Any form of stabiliser to prop up the buy prices and prevent drops simply leads to increased lack of liquidity.

Bid depth is slightly controversial. I agree we need it as part of a functioning market. But at the same time I am certain, from experience, that people will use it incorrectly. You can’t cheat order books. Players will find fair value. We will no longer all profit when the likes of EJ put 100k in and goes on a spending spree. Those will be his purchases at his price and five minutes after he has caused a rise, one trader can list their shares and drop the price again. We all need to worry about the price we are willing to buy and sell for, not what other people are doing. Bid depth will provide a picture which may be moderately useful, but we must acknowledge that the second we stop looking at it, the data is out of date as any trader at any time can add/remove higher or lower bids.

Nasdaq, as many are now cottoning on, is just improved infrastructure that will efficiently handle high volume of transactions. It will have no bearing on liquidity and frankly is looking like a complete waste of time and money until the platform necessitates the need for greater processing power.

Regarding the last two bullet points. This is a finer point and again comes back to really understanding liquidity. Liquidity is high volume of transactions. For this to happen you need both reasons to buy and reasons to sell. Whilst scrapping expiry or making IPD holds valid for longer, on the face of it, increases the value a user can squeeze from their trade. It simultaneously decreases their reason to sell. Less sellers equals less liquidity and in turn creates a stagnant market and slow growth and we are back to having just as many problems than having no buyers.

To reiterate, we don’t have liquidity because of the removal of IS;

Football is a very changeable world with; injuries, transfers, contracts, rotation, tactical changes, managerial changes, player confidence etc so gambling on the outcomes of player futures is high risk by nature. Players can be world beaters today and then a has been tomorrow. Our ability to adapt to both the real football world changes and changes to the rules within Football index (often influenced by OPTA as well) was reliant on the house offering cashback (IS). Whether people used it or not, its presence allowed a multitude of illogical trading practices as well as poor financial management from users.

As mentioned earlier in the article the removal of IS has stopped many forms of trading meaning certain price rises simply won’t happen now and there are less exit points on a player, making the shares less appealing to non-holders and harder to shift for holders. More importantly the removal of IS has probably seen a large number of traders review the amount of money they are willing to have in what is now a very high-risk gambling platform.

The result of this is more money trying to leave the index than is coming in. This creates downward pressure and in doing so has created exponential problems. It has woken people up to the fact that vast amounts of very easy capital appreciation is a thing of the past, in terms of sitting and doing nothing and profiting from a rising tide off of the back of every little announcement etc. Lack of trading has also sucked the fun out of football index and when the fun/buzz stops users stop.

Why do we need liquidity?

Football Index need liquidity to drive commission, users need liquidity to feel comfortable that their money is accessible and that their strategies can be fluid and mistakes can be rectified.

How might we attain it?

  • Widen or scrap the bid zone – a starting point is better than nothing. Any stake in the ground could be the spark to ignite bidding wars and upward pressure. Buyers have the power at the moment and are not willing to pay until they think we are near the bottom. The lack of sell orders to drive the price down and the lack of ability for buyers to place ridiculous low ball bids just mean we are finding the bottom very slowly. This means a prolonged period of steady drops, instead of a short sharp crash. A crash may lead to short term panic, however, the long lasting negative sentiment of months of illiquidity and drops will have a far more damaging effect on the Index. If Messi had no sell price and somebody bid 1p for him, I for one would certainly outbid. We would see a bidding war until a price is reached that buyers think is value. If sellers had full freedom of sell order, they could undercut each other faster to a value they think is fair. Then we have a true buy price and a true sell price and we can see the spread. Wide spread great for profiting through patience and might encourage market makers. Small spreads great for liquidity and chance for growth as new demand would more likely have to buy rather than bid.

  • Allow users to bid and offer at the same time on players (as long as no overlap in price to effectively buy your own shares to refresh eligibility) - Liquidity requires buyers and sellers, allowing each user to be both, instantly increases liquidity. It also allows each user to act as a market maker and potentially tighten spreads which is the ultimate goal for a healthy growing platform.

  • Do not take funds at the time of bid, only on the success of a bid - Allowing each user to place a large volume of bids on their cash balance increases the liquidity because rather than picking one of ten targets, the buyer can bid on ten and then it’s whichever seller acts first. Money will re-enter the market quicker and increase circulation of funds i.e. the seller then becomes a buyer and there is another active bid placed.

  • Scrap the idea of bid commission – bid commission in a buyers market will just see wider spreads as the buyer isn’t going to absorb the commission and has no reason to use the ‘buy now’. Even when the market recovers, the end goal should be to have as tight spreads as possible


I firmly believe that the quickest way up is down. Allow free market, let prices crash sharply and rise just as quickly. Outbidding from the ground up instead of undercutting from the top down will see positive shift in sentiment, portfolios and prices rising instead of falling every time users log in. It would rebound fast. Dividends have doubled, yields are great at these prices. Reality is we need to let some users withdraw some funds and adjust to the new world without IS. Rather than holding people to ransom and propping up old prices with stabilisers, let people leave on better terms. The vibe on social media will improve and Football Index can then think about marketing a happy platform with great yields to potential new customers.

To maintain positive sentiment going forward, a quick mention to things already largely said:

  • Their communications have to be so much better - We went from not enough to too many and no substance. An email every month with an honest outlook on the prior months business and what is round the corner i.e promotions, changes to product.

  • Social media presence – Not only do they need to engage more with the community on a casual footing, but they need to be better at it. For too long I have felt like every decision Football Index make is totally out of sync with what traders want. They really need to get somebody involved either from the community or at least has an interest in Football and Trading and can see things from customers point of view.

  • Promotions – same as above. The suitability and impact of them needs far greater consideration with regards to timing and the realistic movement of value they cause. I’m sure Football Index will have been scratching their heads lately at market reaction to some of the promotions and communications but to many of us it is not a shock.

  • Tech! Nothing needs saying...

If it isn’t broken don’t fix it

In the ensuing panic over the plummeting prices and lack of sell options people are coming up with all kinds of changes to the platform. This isn’t necessary. The only thing that has changed from the product we loved and was so much fun twelve months ago is Order Books replacing the instant sell to house. With order books, we have more flexibility to buy and sell; when things are bad we don’t need to be stuck at the back of a long queue with no chance of selling our shares; when things are good we don’t need the rigmarole of X number of shares being bought at every penny, absorbing peoples cash balances. Now we can jump the queue to sell quickly and we can hit a rise far quicker by skipping a lot of price points.

The game is still the same. We just need to adapt and play it at lower prices to suit the new risk profile and amount of capital people are willing to have in the product. Forgetting our current holding; is it not better to play the game with Messi at £2 instead of £10? Especially now we get more dividends per share and with cheaper prices we can buy more shares?

Relax, what you may never recover in cap ap, with cheaper prices, you can quickly recover and profit again in dividends. And lower prices means higher yield, which will attract new money and then we will all be moaning that prices are too high again and yields too low!

Give us free market. Let prices ‘correct’ and then the fun and liquidity will be back.

Enhancements and FI Healthcheck

Whilst I write this, Football Index have announced an announcement for Friday promising some product features and enhancements. There is no length the community won’t go to these days and sophisticated ways of probing seem to have replaced stab in the dark guesswork.

@indexpump released info from Football Index API request that gives us a clue to the upcoming announcement:

Which reads like we will have market depth, alternate media scores (visibility of what the scores would be in new system or actual implementation?), visibility of player yields and possibly new portfolio valuation method based on average of all sell orders.

Nothing really exciting unless the new media is actually going to be implemented soon.

I did some poking around myself in the last few days and have found the figure Football Index payout daily – a hidden field on their 24 hr metrics:

Dividends paid out with time stamp. I’ve been monitoring since we had the 24 hour metrics and it’s clear Football Index are losing money every day quite significantly. I’ll monitor for a month and produce the results, but Gold days in particular make for horrible reading if you are the CFO!

Of course, Football Index have large cash reserves and seem to be issuing another round of funding looking for £60m investment. There will be no short-term panic, but they need this to turn around as much as the users do – so I expect them to have some tricks up their sleeve in the coming months.

For further discussion or questions, get in touch



Hasselbanker's twopence:

Vespasian has done some excellent digging around on the payouts versus commission. It is very interesting and I look forward to his feedback once he has gathered more examples. Its important to recognise this is so far just a one off example and as this was a media day (lowest payout day compared to match days where the positional dividends plus one place MB plus IPDs greatly outweigh this 12p payout), I'd guess much less trading happens on a non match day. It does go some way towards explaining why FI feel the need to go ahead and introduce the 2% buy order commission even during a crash- something I beforehand couldn't explain. I'd be interested to know how much they took a day on minting new shares now in this new system?

Going forwards, overall, I can see the two sides to the swift crash versus stabilised approach argument. A swift crash (as we saw on Black Sunday) can cause mass panic which is only good for those with cash ready to pounce. It could create too much damage to the platform; it be irresponsible to let it happen. But they then instead need to take gradual steps towards open bidding and selling. You'd hope by now that there would not be so much panic second time round; half of the work may have been done in that crash and the recent drops since.

Some players do still need to drop further in price before I'd bite due to the risks involved- e.g. we've just seen a fresh round of injuries ruling out some regular dividend earners for a lengthy time and these are depreciating assets being held whilst we wait on their recovery with little option to shift funds out to other options internal or external. I spoke to Westy when the Kimmich injury happened (knowing that Westy usually likes to hold these type of FI players in big amounts). I asked what he would do? Normally, he said, money would leave Kimmich and we'd see money move to whoever is deemed to benefit from his absence the most- either a Bayern player taking on the set pieces / his team role or to a PB competitor. Neither seemed to have happened this time. There was the Kimmich drop and even no IS on offer for a player that has been beasting it PB wise, but there was no mirror riser taking the money on. This is due to the current mechanisms locking money in, and possibly current sentiment around the platform that needs to change.

We are also heading towards a January transfer window which can potentially shuffle a lot of the squad list around positively and negatively and as far as we have been told, we are still heading towards a PB matrix update at the end of this season too. Both can affect valuations and potential yields.

However, prices will drop to fair value once Order Books are fully active- this is when I plan to enter the market and bid to my own valuations which i just physically cannot do yet due to the zones and the rigidity of the system. If my offers get accepted, great, I'm finally in properly; if they don't get accepted, fine I'll wait and look elsewhere in the meantime.

With regards to Friday's announcement, it needs to show true progress. The sneaky possible preview shared by @indexpump hints towards the 'features' they are talking about being added and explained. I'm not sure this alone will provide a boost to the market which is probably needed whilst they keep aiming for their end goal, so I'd wager we see some form of bonus chucked in too- possibly an MB related promo if the new MB scoring is being introduced.

Good luck indexers, BeGambleAware!



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*edited 13.12.20