As trade season opens up, a great goal is to work an arbitrage play. In an arbitrage play, your goal is simple: to buy a player at a price then sell the player at a price higher. The gap in your sale price and your buy price is free, riskless profit.
The Approach
To make an arbitrage play, you need to be active in the trade market. Owning multiple teams is also important to create opportunities. When approaching arbitrage, look away from your individual team and towards your portfolios as a whole. If you like Kevin White, owning him on half your teams may be a realistic option. If scoring is similar across your leagues, he will have similar value across your leagues. What exact team you own him on is less important that how many shares you own of him.
The arbitrage play is easier with a player you own a lot of shares. Players who are controversial for some reason offer good arbitrage opportunities. These players will have owners on both sides of the valuations. You are looking for one owner looking to buy the player at a higher price than you can get the player in another league.
The Arbitrage Play
White is a good example of a player to try to arbitrage. His stock is down and his owners likely had to pay a top four rookie pick two years ago for him. These owners may be looking for a way out of his stock. In a year with a loaded rookie class, a White owner may be hurry to cash out. It is possible you can get White for a pick around 2.04.
On the other hand, a fair number of owners are optimistic about White. They see the draft capital the Bears invested and his athletic profile as signs of optimism. These owners may see paying a 1.10 for White as an attractive investment.
Your challenge is not to take on stance on the debate. You are not trying to add or drop shares of the player. Instead, the challenge is to be the broker to the owner that wants to sell and the owner that wants to buy. In essence, give each owner what they want. If you can sell White for 1.10, while at the same time buying White for a 2.04, you have a free package up. By acting as a broker, you moved up from 2.04 to 1.10 with at the cost of moving White from one team to another in your portfolio. The only cost is the effort, and you have taken no risk.
- Buy White for 2.04
- Sell White for 1.10
- Result: Buy 1.10 for 2.04
The trade takes a lot of work in knowing the markets in your leagues. A knowledge of what your fellow owners value is also helpful. If you are worried about getting stuck with more shares of a player in your portfolio than you want, simply execute the sell side of the transaction before buying the player.
Conclusion
There are a lot of opportunities to arbitrage player values in the dynasty trade market. If done properly, you can add assets to your dynasty profile with no risk. Trade bait updates by other players can help you identify where you can buy the player cheap. If you can get a late round pick thrown onto the back-end of the deal by the other owner, your profit will be even greater.
