How Does TeamStock Work?
HOW DOES THE GAME WORK?
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It is quite simple. You invest in the odds of respective sport teams to win their championship. The dollar price for a stock always reflects the odds of that team to win the championship. So, if Team X is priced at $13.21, it means their odds to win the championship are 13.21%. This means that the cumulative stock prices in a sport league (e.g. NFL, NBA, MLB, UEFA Champions League, League of Legends, etc.) is always set at $100 and that every trade will affect all stock prices in one league.
HOW DO I PLAY?
You join or create an investor group. Some investor groups are free, others require an entry fee (which will go to the winner or the top ranked teams). Every investor group has a starting date to begin investment, and an ending date. You win by receiving the highest Return on Investment (ROI) at the end date of the group. The ROI is calculated in percentages and is independent from the starting amount of an investor. Each investor group will have its unique requirements for their investors, ranging from number of teams or leagues one will have to invest in, or the minimum numbers of transactions each investor will have to make per week.
HOW ARE SHARE PRICES SET?
When the market opens for one league or event, the stock prices will closely reflect the odds given to a team or player on the sports betting market, yet it will be adjusted so that all share prices will add up to a collective price of $100 – which represents 100% (e.g. the collective odds of the teams or players to win the championship is 100%.). This makes the odds for each team a much better proposition than if you would place money on a championship wager at any betting company.
WHAT WILL MAKE SHARE PRICES GO UP OR DOWN?
The stock price represents the chances of that particular team or player to win the championship for that particular league or event. Anything that happens between the opening of the market and its close (the actual championship) could entice people to buy or sell stock, including trades, wins or losses during the season, injuries, coaching changes, or simply the impulsive behavior of other investors.
The market is a zero-sum market, which means that the collective market price of $100 can never go up or down. The share price of one particular team reflects its percentage of stock that contributes to the overall market cap. So, if one person buys shares in one team in the NFL, the stock prices of all other 31 teams will go down 1/31th part, in result of that particular transaction.
Once a team or player is officially out of the race (e.g. can’t reach the playoffs anymore, or loses a playoff game), their share price automatically defaults to $0.00, and their stocks are taken out of the market for that season. Consequently, the odds of the other teams to win the championship will increase. If a team or player wins the championship, their share price will be $100.
WHY IS THE ACTUAL PURCHASE PRICE SLIGHTLY HIGHER THAN THE CURRENT MARKET PRICE?
To prevent people from making money off their own transaction (your transaction positively affects the price of the stock you are buying, and negatively when you are selling), the algorithm calculates the price of the stock once your transaction is completed. This difference will always be very small, as your one transaction has only a minor effect on the overall stock price of a team.
WAIT A MINUTE, I TRIED TO SELL MY STOCK RIGHT AFTER I HEARD MY QUARTERBACK HAD A SEASON ENDING INJURY, AND/OR WAS ABOUT TO LOSE THEIR PLAYOFF GAME, AND THE DIFFERENCE BETWEEN THE CURRENT MARKET PRICE AND ACTUAL SALES PRICE WAS REALLY HIGH. HOW DID THAT HAPPEN?
If you try to make your transaction during a big moment with high trading volume, the likelihood is that your transaction request will be placed in a queue, and that by the time your transaction request is processed, the actual stock price already dropped. The beauty of TeamStock is that it fluctuates back and forth between an investment market and betting market, and if you make your buying/selling decisions, based on the big moments, you will have to react to these moments as quickly as possible, and they are high risk investments (See strategies to invest below).
3 BASIC STRATEGIES
* You may want to mix and match these strategies, based on your ability to stay in the loop on the specific contest, and your knowledge of the game.
3 BASIC STRATEGIES
1.
First, you can look at Teamstock as a traditional betting app, just with better odds. If you do so, you simply identify the teams you think will win the championship eventually, by their stock and sit on it. That’s it. If you lose faith in them, you sell the stock back and you take the loss. This is the strategy that would require the least amount of engagement.
2.
Second, and this is my favorite strategy, you identify the teams that you think will outperform on expectations in the upcoming weeks/months, and buy low, sell high. These are teams that you might not think will win the championship, but whose stock might increase from 2 chips to 12 chips. You sell the stock with the outcome still in the balance. This requires a bit more engagement, but you can basically pick your moments.
3.
Lastly, you act similarly as a high frequency trader, and buy/sell trades stocks because of minor price changes that are offset by a single game victory, an injury or a trade, or by the game flow of a playoff game (in which the stock of one team would go down to 0, because they would be eliminated. While this strategy could lead to the highest ROI, it is also the most risky strategy. Keep in mind that if you pursue this strategy, watching games without delay, and/or receiving the latest trade or injury report can be crucial, as your winnings might become dependent on your ability to buy or sell immediately following an outcome or change. It would require constant engagement.