The stock market can seem like a foreign language to those who’ve never dabbles in it before. It moves quickly, there’s big money at stake and it’s often who you know, as opposed to what you know that can determine if your successful in it.
We’d guess that at some point the majority of people reading this article have at least thought about having a go in the stock market at some point. We’d also guess that most don’t because of the exact reasons that we mentioned above.
So, what if there was an option where you could access the same sort of principles in money making, but with a subject that you do know? Football stock markets might just offer that opportunity that you’ve been waiting for.
What Are Football Stock Markets?
Football stock markets work in the same way that traditional stock markets do, in that you buy stock at a certain price and then decided to sell that at some point in the future, hopefully bagging a net win from your investment.
In this case, the stocks aren’t businesses or even football teams. Instead, they are players. You’re able to buy shares in a range of players from across some of the best football leagues around the world and trade them as they go up or down in value.
Basic business principles can be applied here and you need to buy low, then sell high to potentially lock in a net win. Prices can start really cheap and they work up as the player becomes more popular and has been playing well.
What Platforms Are There to Use?
Right now, there aren’t an awful lot. Football Index is the biggest and its they who are figure heading the industry. Given that they’ve shown early success from their platform, the number of other sites that are likely going to pop up over the next few years will be high.
Throughout this article we do want to discuss the general concept of how football stock markets work, but it’s just going to be easier if we work through the platform of Football Index to highlight what we mean. Therefore, if we are referencing how a particular process works, it will be related to that of Football Index.
As more companies enter the market, we may look to address this and highlight how they might differ.
Please Note: Football Index Closed in 2021
Within this article we talk a lot about Football Index, however they entered administration in early 2021 which means you can no longer bet with them. At time of writing there are no alternative platforms.
How Do Football Stock Markets Work?
You’re obviously going to need to have an account and then when you’ve logged in you will be greeted with a site that looks a little like a Betfair betting exchange. You can choose to either buy or sell the stocks of each player in the database.
The price that you see will represent the cost per stock of each player. For example, at the time of writing, Trent Alexander-Arnold of Liverpool is costing some £3.39 per share. Just the like stock market, you can buy as many shares as you like here at this price or if you already have shares, you can sell for the trading price of £3.29.
It’s worth noting that the price here for TAA is high and he is currently one of the highest rated players in the index. Prices can range anywhere between 7p a share to that of £7 per player.
Determining the Price of a Player
The key area of the index so knowing what to look out for that will affect the price of each player. There are more than just on-field actions as well, so it can get quite deep.
The first thing to note are the on-field performances though and this is going to have the biggest effect. To put it simply, the better that a player performs, the higher their rating and the more their stocks will rise.
To compare this to business, the better the business does, the more money it earns, the more its stock is worth. The same concepts can be sued for the players and how they perform.
It’s also worth noting that supply and demand do play a part in the price as well. This means that if there are a shortage of shares for a certain player, then people are going to be able to sell for a bigger price. If someone sells a shed load of shares in one player, then their price is likely going to drop as more people can get hold of them at lower prices.
The final part to the price fluctuations is that of any media news or gossip about the player. If they are in the news a lot for transfer rumours or just about anything good or bad, then they will be getting points as they are relevant at the current time. The amount the price will jump from this is often lower than on the field activities, but still will play a big role in the overall price.
How Do Dividends Work?
Dividends are one of the ways that you can get a pay out from a football stock market. For those that don’t know, a dividend is where you paid out a set fee for good performances based on the number of shares that you have in that player.
Dividends aren’t reflective on the price of your player, they are just based on outstanding performances or media buzz for that game week. The amount that will be paid out is dependent on the number of games that take place that day. The more games there are, the higher the ranking so the higher the dividend.
Matchday Dividends Table
|Single Day (1-4 Games)||Double Day (5-14 Games)||Treble Day (15 Or More Games)|
Non-Matchday Dividends Table
As you can see, there are a number of variants that can be applied here, such as the position on the pitch for that player and whether they are playing on a match day or not.
For example, let’s say that you have 100 shares in the best midfielder from a Double Day match day, then you would get 8p per share, which would be £8 in total. This money is instantly applied to your account balance as a net win on that player.
This is an area of football stocks that is quite unique and one that’s actually good fun. We spoke briefly about it earlier but given that dividends can be paid out each day on this, it’s something that we wanted to touch on further.
Every time that a player is mentioned in the media, the “buzz” for that player will increase. The more unique that each article is, then more points that will be scored.
For example, there might be articles about Marcus Rashford’s latest injury on the back of a defeat to West Ham. The points for each article vary based on the depth of how much they talk directly about Rashford in that article. They do this to gloss over things like clickbait, which might have a headline all about one player, but in fact only includes a sentence or two within that whole article.
The ratings are reflective on how much “page time” that Rashford is getting in each article. The more that is dedicated to him, the higher the rating.
There are going to be some players that hit the headlines more than others. It will come as little surprise to hear the likes of Neymar, Messi and Ronaldo are the three highest rated players in the index for Media Buzz over the last few years. They will get dividend payments for this, but they will also cost a lot more to have a share for that player.
The media section is one that is fast moving and dividends are paid out daily based on the number of points they have earned that day. Points are scored on for new articles, so they can’t score twice from the same article on different days.
Making Money Outside of Dividends
Whilst dividends are great, they are really only bonuses for the player and the main money that most people earn is from the price of that player.
The price comes from a combination of all the markets that we’ve spoken about so far. So, even though a player is playing well, they might not be getting dividend payouts, but this does not mean that their stock will not keep rising.
Sites like Football Index make it really easy to check to see which players are trending and which players are on the decline. You can often get a feel for players that are doing well just from being a part of the sport and following the top leagues.
Data will be shown on site that will indicated how the players price on the index has changed over time, as well as their current value. It is easy to spot how a player has increased or decreased on price over a significant period. They range from 24 hours up to 1 years’ worth of data, which is great as it suits a huge range of players, including those looking for a quick fix, to those playing the long game.
In TAA’s case, we can see that just 3 months ago he was priced around the £2.85 per share and now he is up to £3.39 per share, along with being one of the rending players on the site right now as well. This 54p increase per share is going to make a lot more than most dividends and your 100-share stake would have given you a £54 increase or an 18.94% Return On Investment.
How Do Companies Like Football Index Bring in Money?
This is a common question that we get asked and quite simply they take a commission from every sales transaction. So, if you were going to sell a number of shares in a player, hopefully to release some of your net wins, then they would take a percentage of this.
Football Index take 2% and we would guess that this is pretty common across the board. It’s a small price to pay really given that they have to make a return too, but it’s one that you need to factor into your bottom line as it can add up if you’re working with small margins.
To put it into some context, when you use a betting exchange such as Betfair, they take around 5% of all winning bets, so it actually works out to be pretty good value.
Can You Make a Return From Football Stock Markets?
The simple answer to this is yes. But you need to put the work in as it’s not as easy as you might think.
It works in much the same way that online betting does in that you need to research your picks before you place your bet. You try to work out those teams or bets that could do well and then you bet accordingly.
The basics for this is pretty much the same. You’re looking for players that are either on the up or are likely going to do well in the coming days or weeks.
For example, if you know Arsenal are playing the bottom 3 teams over their next 3 games, then it would be fair to think that their star striker, Pierre-Emerick Aubameyang, is going to do well here, so it would be a going time to buy shares.
The flip side to this is that if you had defenders in your team coming up against a team like Arsenal, then it might be a good chance to sell them.
It’s about how deep you want to get to the players of the game and how good you are at spotting the chance to see players stock continue to rise. Looking at Alexandre-Arnold again, he’s seen a big rise in just 3 months and in business, if someone were to offer you an 18% ROI in that timeframe, you would snap their hands off.
Whilst this isn’t a strategy article for football stock markets, if we had to give one big of advice it would be to spot the young talent coming through early in the season and letting them increase throughout. Chelsea in the 2019/20 season are a great example of this with the likes of Mason Mount and Tammy Abraham both seeing their stock soar over those months just because they’ve locked in a run in the 1st team.
Is it the Same as Fantasy Football?
We’ve seen lots of people compare football stock markets to fantasy football and whilst there are some traits that are similar, they are very different things.
The first difference is that you don’t need to choose 11 players from fixed positions. The stock market allows you to choose who you want and from where you want.
Next thing to note is that you need to keep in mind that media buzz for stock market betting, along with their on-field performance. This can play a big role and is why you may see players that are trending upwards in price, even though they’ve been fairly average on the pitch.
How are They Licensed?
Whilst the reference to the whole platform is seen to be a link to the stock market, it is in fact just raw gambling at the end of the day. This is why these companies are required to have a full gambling license from the UK Gambling Commission.
|Trading Name||Licensee Name||Location||Reference|
|Football Index||BetIndex Limited||St. Helier||43061|
Football Index, for example, has a “General Betting Standard – Real Event” license that allows them the facilities to provide odds on real events, such as football. They’re able to do this remotely as well, if they wish.
Should I Try Them Out?
Just before we wrap this up, we wanted to add that football stock markets, just like business stock markets (for the most part) are not get-rich-quick schemes. As you saw with our Trent Alexandre-Arnold example earlier, he’s one of the leading lights in the Premier League right now and has risen 18%. It’s not huge, but it is significant.
The idea of these stock markets is so that they are slow burners and allow people to increase their portfolio over time. You can potentially come out with a net win, but you need to be patient and pick your battles with these.
It is still gambling though, so bear this in mind. There is a chance that you can lose all your money and lots of people will. But if you’re clever and if you’re a bit of a football geek, then there could be money to be made!