The ‘Eye’ – Trading in an undervalued market

Congrats, if you reading this then you find yourself in that rarest of things – a trader in a market that is almost uniformly undervalued! The incredible dividend review by Football Index has paved the way for potentially huge growth over the coming season.

Opportunities are everywhere, so how do we best take advantage?

The market hasn’t moved as much as traders might have possibly hoped or expected. It’s going to take time (and new money) for player prices to increase and approach their true worth. The next few weeks represents a huge opportunity to fully capitalise on this.

Here’s a look at which players rose the most since the announcement:

The increases came into mainly the top end but there is still lots of value lower down, especially as IPD’s have doubled! More on that later.

Keep it Simple

Let me start by saying in a market like this, there is no need to be too smart about things. Abstract plays which are fantastic when trying to squeak a little more value from a par or over valued market do not apply here, so forget for the time being about the 16 year old thats tearing it up in the Swedish Superettan league, his time will come, but there is better value to be had much closer to home.

Bid Don’t Buy

It’s a rather obvious point to make, but in the current market we find ourselves in the vast majority of the time you should be looking to bid and not buy, outside of Messi proportion scenarios FOMO does not apply. FOMO is a fool’s errand at the best of times and this is even more true to remember in the market we find ourselves in. New money to market is being spread thinly right now, there is scope to find bargain bid opps everywhere (as I write this I just picked up a Premier league forward regular starter at a 20% discount). Bids are commission free until the end of September, use it before you lose it.

Look for Strong fundamentals

Player prices are in the current market meaningless, traders themselves will have to value players for themselves and to do that research is imperative. What scores have your potential picks scored previously? How do their base scores look? How many shots on target?

Members of IndexGain can use our BuzzPro suite of reports to research player stats using the Opta stats player screener, historical scores, dividends wins, expected dividends vs actual, scores vs price and much more. Doing your research means your reasons for valuing and buying a player are much more solid.

Fixtures Fixtures Fixtures

In Play Dividends (IPDs) just doubled!

This will help revive in play trading to levels we saw at the start of the previous season. In fact as for the majority of this September, we will see even higher IPD payouts (10p for FWD/MID and 20p DEF).

Add to this a lot of green money via new traders ushered in by the huge upcoming marketing campaign we can expect some massive part FOMO driven moves on game days. Being first to react is great but it’s a tough game. Far easier is to be prepared, look for players with kind fixture lists, with as many games in this period as possible and those that have proven goal scoring ability.

Use BuzzPro Fixture Analysis to do just that .

The Eye

Going full circle, as first mentioned the value is everywhere, the market has been unsure, in fact unable to fully exploit the new found value that is to be found in various position types and leagues. In a market such as FI the value will not be filled rationally and uniformly. Instead we are very likely to see aggressive rises driven by single match performances.

So for example, if a young and relatively matchday score friendly ¬£1 defender scores a goal, then the drive upwards will be hard and fast, particularly if they score before the cut off for match day dividends. The eye of the market will be cast on a few players at a time. Soft money will be in and out but money will linger and so the price of player will remain higher than it was pre goal. And so it goes, one by one the ‘Eye’ will turn to each player and in turn the price rise which will be in many cases dramatic and lasting in line with the dividend review. Be where the ‘Eye’ has not yet cast a look.

In short, given the new dividend review, pretty much every player is overlooked right now price wise and so the market doesnt know where to turn, but some players are overlooked more than others and identifying and buying these players early is key. When the ‘Eye’ turns to the players in your portfolio you will be very pleased that you did.

Buckle up and enjoy the ride, its going to be one hell of a season

Share This Post
Bishop
Written by Bishop
Worked in Asset Management for 10+ years. Professional Trader of Things since 2013: currency, sports, footballindex, tiddlywinks. IndexGain Co-founder
Have your say!
1 0
IndexGain
Join our 8000+ Football Index trader community on Slack for free. Click here to sign up!
Holler Box