Buying is easy. Selling is hard.
When is the best time to sell?
Should you sell now whilst he’s rising?
Should you sell as his price flatlines?
Should you sell as he drops?
Should you hold on in case his price bounces back up?
Oh so many questions….
When it comes to selling, it triggers a host of emotions and more often than not, you end up selling at the wrong time.
Timing your sells is such a difficult skill to master – I mean, to actually be able to pick the top every single time which is why it feels like when you sell, you’ve kinda mistimed it.
Understanding what the BUY and SELL prices show?
First thing first, you need understand what makes up the price you see for each player.
In the lead up to Order Books implementation, the prices are made up by bids and offers which other traders have set to buy and sell shares. These are prices set by other traders – nothing to do with prices set by Football Index.
BUY PRICE = this is made from the average of the lowest 900 offers (requests to sell) from other traders. If you wanted to buy 10, then you will buy the 10 cheapest shares someone else is willing to sell them to you for.
SELL PRICE = this is made up from the average of the top 300 bids (bids to buy) from other traders. If you wanted to sell 10, then you will sell to the highest bidder for that player.
What traders are looking to buy or sell for is shown in the depth.
Depth – What does it show?
Depth shows the highest 5 price levels on the buy side (bids) and the lowest 5 price levels on the sell side (offers). Traders looking to buy. Traders looking to sell.
So in the above example, on the bid side (blue) you can see the top bid for 1 share is £5.42 and is showing in the top row because it is the highest price someone is willing to buy for. This is likely to be one trader basically saying “I want to buy one share for £5.42”.
In the 2nd row you can see 23 shares with a bid price of £5.41. 3rd is £5.40 and so on.
Now you could be wanting to buy this player urgently, you might jump the ladder by bidding £5.43 and you would be first in line if someone decided to take you up on your price.
Or you could market buy (buy now) and buy 100 shares at £5.75 (top offer on sell side).
On the offer side (red) you can see the 180 shares for £5.75. This is likely to be one trader who is basically saying “I will sell my 180 shares at £5.75 each”.
Then you have another 20 shares at £5.77 and so on.
You could list your shares at £5.74 and jump to the top and wait for someone to match your offer. Or you could instant sell your shares to the top bidder at £5.42 and £5.41 depending on how many you are selling.
Why do we only see 5 rows?
We only see the highest 5 levels (for now). Some traders are calling out to see the highest 10 rows, but that is for Football Index to decide how many levels are shown.
Ok so the price in buy/sell buttons aren’t really what I’d be buying or selling for right?
The top prices shown in the buy/sell buttons are NOT what you would be buying/selling for if there is depth available.
Buy button shows £6.09. But if you were looking to buy now, you would pay £5.75 as this is the lowest price someone is willing to sell for (top offer).
Remember, the buy/sell buttons are averages.
This is where many traders are left bemused as to whether to buy a player or sell a player – you cannot rely solely on the prices shown on the buttons – you must consider and view the depth also.
Hopefully, this helps understand the prices shown in the buy/sell buttons and what is displayed in the depth view.
The difference between the buy price and the instant sell price is known as the spread and can vary dramatically. Sometimes more when a raft of traders start selling a player in droves.
Over the course of a week, a players spread can change drastically depending on how traders are setting offers and bids to buy or sell that player.
We have a detailed article on spreads here which you may want to read too.
When you instant sell, you pay the % spread PLUS the 2% commission on the total value of the sale.
Things to consider when selling
1. Set a price target
If you bought thinking that the player is undervalued, then set a price target where you think he’s reasonably valued – and if that player reaches that point then it’s time to reassess the situation.
Review the chart, fixtures, match day scores and performance data to see if there is an opportunity for further price rises – if you don’t feel confident then it’s time to possibly put some offers into sell.
2. Assess the demand
Look at the depths to see the quantity of shares are available and see if there’s a high volume or low volume on either side. You could snap up bids available and sell immediately or wait for higher bids to come in.
3. Instant sell if you can guarantee you can make up the spread & commission quickly
Sometimes, a player won’t have moved in price for ages. So, you get bored holding that player but you see another player where the price is slowly rising.
If you can almost guarantee that that player can gain 5%+ or so in a day or two then it’s worth instant selling and moving over to the other player.
What you shouldn’t do though – is instant sell in a panic without having a player to move your cash into quickly to recoup any losses.
4. Lock in profits or take the loss?
This depends on why you purchased that player to begin with.
If you had set a price target in the first place, then if you want to lock in the profit then you should think about selling up and moving onto the next opportunity and building your bank up slowly.
If you purchased thinking he would rise but he’s headed in the opposite direction then you may want to stay a bit patient or take the loss on the chin and move on and recoup the losses elsewhere.
There is no right or wrong answer – all depends on your own objective for buying such a player.
Hope this helps with your selling strategy – if you have any tips of your own please do leave a comment or share your tips by joining IndexGain.