Long Reads

Football Index Review 2020 – is it worthy of the hype?

honest review of Football Index

If you’re often on the lookout for new ways to make money, listen regularly to TalkSport or even if you tuned into BBC’s coverage of the Oxford vs Newcastle FA cup replay recently then the name Football Index might sound familiar.

It’s an interesting concept and one that’s well worth having a look at but we suggest going in with your eyes open.

Here is our brief overview of what to expect.

What is Football Index?

In a nutshell, Football Index is a stock exchange where you buy shares – called futures – in a footballer rather than in a company. The big attraction to the index for many is the opportunity to dabble in shares and the platform facilitates that well with the use of various data cuts and charts to help keep you informed.

As a business plan from FI, it makes perfect sense as potential investors are much more likely to back their knowledge in something they’re passionate about i.e. football than a business, which as general society goes, is something people are less informed about – or at least they think they are.

How can you make money on the Index?

There are three ways to make money on the index. The first is obvious – buy low, sell high. Regardless of what you’re trading in, the dream trade is turning an investment of £10 into a win of £100.

The other ways you make money is through dividends and these take on two main forms on the index – media dividends and match day dividends. Your dividend payout is a pence per future ranging between 1p and 8p; how this translates into a percentage is dependent on how much your future cost at time of purchase.

Matchday dividends are awarded to the top scoring goalkeeper, defender, midfielder and attacker with an overarching ‘star player’ dividend too based on FI’s point scoring metrics. For instance, if you hold Cristiano Ronaldo futures in your portfolio and he top scores for a match day then you’ll win dividends for both the top attacker and the star player – potentially netting you 16p per share. The other dividend is a media payout; this is calculated from the number of times a player is referenced in online media (not all websites are included – FI have 20 well known sources they rely on) and then a score is assigned by FI based on how positive a story is deemed to be so the headline ‘Ronaldo seen on beach’ will score fewer points than ‘Ronaldo wins Balon D’Or’.

Cristiano Ronaldo on Football Index

There is a third dividend that has recently been introduced, which sees you receive payouts based on activity within a match but it is only eligible for 30 days from purchase. Whilst strategic purchasing i.e. before a busy or favourable run of fixtures, can see you net some bonus cash you should not use this dividend as a reason to buy futures.

How do you make money on the Index?

Did you notice the subtle change to the subheading? How can you and how do you – the two are quite different things.

Buying and Selling

The flipping of shares is a great way to build your balance, it can be done and is the best way to make substantial gains. Odion Ighalo, for example, on 23rd January was priced at 29p and then came the murmurings of a move to the Premier League with Tottenham and Manchester United linked with moves; his price today sits at £1.48 – a 410% increase.

The big downside of following this method is the depth of player availability on the platform. There are loads of players available to purchase – over 3,000 in fact – but the next big thing might not be listed. For instance, we attended Ipswich Town versus Derby County last season and Fikayo Tomori was, in our opinion, head and shoulders the best thing on the pitch but on checking FI he wasn’t available to purchase. Now forgive a little conjecture, had Tomori been on the platform he might have cost 40p per future but by the time he was introduced he had already starred for Chelsea and won his first England call up. He was floated on to the exchange at £1.40 offering very little value for money.

Unfortunately, this is a common theme with players who emerge from under the radar meaning opportunities for real zero to hero growth are limited – but, importantly, not impossible.

Dividends

If you can combine a potential dividend winner with an upward moving price then you’re on to a winner; the trouble is nailing down a reliable dividend winner is easier said than done.

In the match day sense, the amount you gain per dividend varies depending on how many games are played – the fewer games, the lower payout. It’s also worth noting that only players from the top five leagues (England, France, Germany, Italy and Spain) are eligible for these wins with the exception of Europa League and Champions League days where those other players are included.

Some people try to track performance stats of players but, in truth, there are so many variables e.g. the way fixtures land and the number of metrics used alongside there being so many players in the pot that winning on a consistent basis becomes a little bit of a lottery. The exception to this comes as European competitions enter their latter stages and the pool of eligible players dwindles.

Media dividends is a similar deal but somewhat more predictable especially on non-match days when payout goes to three places rather than just the top scorer. Transfer news is a big driver of who wins the media dividends and someone like Paul Pogba, who has a strong off-field presence anyway, will always be in the mix for a payout. Whilst this approach is handy to top your balance up you need to consider the true value of a win; Pogba might win 10 media payouts in a month giving you up to 50p in cash terms but that’s only a fraction of his future price (currently £6.12) and you’ll need either a natural price growth or a long term hold to realise genuine profits.

Paul Pogba on Football Index

A closing summary 

FI truly does give you the option to make money by backing your knowledge of football players and the circus that surrounds the sport. A sign up and deposit is 100% worth it if you’re after a longer term bit of fun that could see you win some cash along the way but use it like a game and not a big bucks investment.

Of course, they also offer a risk-free sign up process of up to £500 for seven days so, if you’re on the fence, why not sign up and explore for yourself.

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