Share Split – What Effect Has It Had?
This week Football Index implemented the ¼ share split. Many of us ‘traders’ had been eagerly anticipating this adjustment since the idea was mooted months ago, but what effect has it actually had on the market as a whole so far? In large, it’s been positive, prices have increased across the board and price variability amongst player futures seems to be markedly improved.
Before share split the ceiling price for player futures was approximately £6 per future. However, within hours of the ¼ split taking place Ronaldo had soared to a price of £2.10 per future, equating to a pre-split price of £8.40. Whilst players such as Neymar, Rooney & Ibrahimović also achieved notable increases in price shortly after the share split taking place. Yet despite these significant increases, it if of course important to remember that the ‘Buzz’ dividend per future has also been divided by four. Instead of the original dividend of 20p per future held, traders will now receive a dividend of 5p per future. Consequently, it can be questioned whether it is wise to invest in a player at a price of £2 when 40 Buzz wins would be required to return that £2 outlay. However, that is of course relative, it all depends on how much you expect that player to win the Buzz, and whether or not you think they will remain, increase or decrease in price throughout your ownership. Personally, I doubt we’ll see player prices reach the heights of £5-6 again here on Football Index without further dividend win mechanics in addition to the ‘Buzz’ in place. Why? Well in my opinion, and it is only an opinion, it makes little sense to buy a future for £5 when the potential reward is just 1% of that at 5p.
Overall, I feel as if the share split has been positive, it will increase interest in the players who sit outside of the elite group of players priced at more than £1 per future, traders will buy and sell in greater volume, and the concept of FootballIndex will look more appealing to potential new users.
Current FootballIndex portfolio:
- Neymar x 1240 (+£260.40)
- Ibrahimović x 400 (+£300)
- 375 x Griezmann (+£34.25)
- 320 x Mhkitaryan (+£22.40)
- 305 x Rodriquez (-£9.15)
- 95 x Rose (-£2.85)
- 80 x Rooney (+£43.25)
- 60 x Coman (£3.60)
Overall profit on FootballIndex to date: £1,803. A return of 72% on a ~£2,500 investment.
If you're new to the Football Index then check out our Football Index beginner's guide where we explain in detail each of the platform's features.