The substitute market is currently the market that comes with the biggest risk, but also one of the biggest rewards. We use it often, but always look to manage our risk.
When it goes well, it can go really well! However when it goes wrong, you could end up paying 15p for a player that doesn’t make it onto the pitch and the market settles at 0p. Over a long period of trading, it is certainly a useful strategy. Providing you do your research.
Before we get into some trades, we want to highlight a few things:
- Trading the sub market IS a risk. We don’t want to tell people how they should be trading, but we want to highlight the risks that traders should consider.
- Remember, the SportStack ruling is: An unused substitute pays out 0p. This means you could lose your entire stake if you buy a player in the sub market and they do not get on the pitch.
- Research, as always for us, is key.
The quick flip
This can be a consistently profitable strategy, provided it’s implemented properly – as the name suggests, you have to be quick. If, during a match, you see signs that a player is coming on, eg manager is having a word, or he’s getting he’s kitting up on bench, there is usually a profit to be made from buying that player very quickly. Very often, the player’s price will jump by 25-50% once they’re on the pitch. But just as you need to be quick buying, you also need to be quick to cash out, as these price movements are often short-lived.
Below we can see Phil Foden’s price jumped as high as 27p when he was subbed on against Burnley – in the 80th minute! We clocked that Pep was having a chat with him, and so we were almost certain he would be getting on the pitch. In this case, his price jumped by more than 50%, allowing us to lock in a quick and tasty profit.
It is worth bearing in mind that, even if you are not quick enough to buy the sub coming on, quite often these prices overshoot. Foden’s payout settled at 9p in that Burnley game, so the price spike offered an opportunity to short for a good profit. Always be alert to opportunities on both sides!
Back the sub early
There is more risk attached with this strategy, as at kick off you can’t really be sure of how the game will pan out, whereas with the quick flip, you are almost certain the player will be coming on.
Research is key here – it helps to know which players are often-used subs, thereby swinging the probability of the player coming on in your favour. It also helps if the player coming on as a sub makes sense in the context of how you expect the game to pan out, eg if you think Newcastle will be chasing a goal in the second half, Andy Carroll is even more likely to come on.
Buying early offers the additional upside of the player coming on before 30mins, thereby earning a payout of 25p rather than 10p, just for being subbed on!
In the trade shown below, we felt Rodrigo was certain to be subbed on due to Man City’s injury issues (note: research was key), so we bought him not long after the substitute market opened up, and sold quickly after he came onto the pitch, banking £6.72.
Letting the trade ride
In the previous two examples we’ve closed the trade once the player has come on, however we have also let some trades ride out. It hasn’t always gone our way!
As you can see, not all substitute trades work out, but we don’t like to shy away from a loss. We attempted to start cutting losses on Lacazette, but couldn’t fully trade out due to a lack of liquidity.
Can I improve my chances with the substitute market?
We believe everyone can swing the probabilities in their favour.
- Watching games live always helps. But you’ve still got to be quick!
- If you’re streaming online, you’re normally at least 30 seconds behind – this puts you at a major disadvantage as anyone watching live will have already made their move at a better price than you.
- Do your research on teams; which subs regularly come on, and which don’t?
- Consider how you expect the game to pan out; that is inevitably going to have some bearing on what changes are made.
Here we’ve detailed a couple of basic trading ideas, but we will expand on some of our views of the sub market in later blog posts! As always, let us know if there is anything you want to see us write about.