Things to consider when trading

Because of different formatting and roster rules, trades are a little different in fantasy baseball than in the majors. Due to this, there are a few things one should keep in mind when trading in fantasy. While trading is certainly part art and part science, I think these guidelines should be able to help you out the next time you try and make a trade.

1. How is your risk distributed
Let’s say that you trade three $10 players for one $30 player. A few things stick out about a trade like this. Just because 10+10+10=30, it doesn’t necessarily mean a trade like this is perfectly equal. For one thing, it is much easier to find a $10 player than a $30 player. However, this also means a $30 player is harder to replace. In other words, if a $30 player gets hurt, it will be much harder to replace that production than if one of the $10 players gets hurt. This means it is important to think of the makeup of your team, where you are in the standings, and where you could possibly move up in the standings while making a trade like this. There is another important point to make for a trade like this.

2. Who is replacing the players you trade away?
Using our example above, say you are the one trading away three $10 players. A big factor to consider when trading is who will be inserted into the two extra roster slots you have gained. Will it be players on your bench? Or are you going to pick up a free agent or two? Free agents are generally a lot more easier to pick up in fantasy than in the majors. Either way, it may be that your replacement players don’t have a drop off from the traded players. If this is the case, then it’s probably a little easier to trade three guys for one. Also, if you are the one acquiring the three players, think of which players you will be replacing.

3. Regression to the Mean
Remember, you should be trading for a player based on what he is going to do, not what he has done for one half of the season. Keep this in mind when you try to trade for the player who’s off to the hot start but has shown shaky skills. This is equivalent to the saying “buy low, sell high.” Don’t pay for what a player has done but what he is going to do. Sal Baxamusa’s updated marcels projection system can be especially helpful for this.

4. Think of the other teams
Sometimes weakening another team is just as good as improving your own team, especially in roto. For example, say you’re in second place and you see that the first place team is only a few steals away from dropping a few spots in that category. Trading a few stolen bases to one of the opposing team could cause the first place team to fall in steals and allow you to pick up a few points and rise to first. Make sure you know the makeup of the other teams in your leagues and what the spread is for each category.

5. Flags fly forever
This is where your league set up is particularly crucial. If you’re in a keeper league, you’ll potentially have a difficult decision to make during the trade deadline, just like major league teams. You may have to decide if trading a prized prospect for the last piece of the puzzle will be worth it. In general, I would say that trading pitching prospects are generally worth the risk. Of course, a lot depends on the parameters of the trade and the contracts that are involved.

6. Endowment effect
The endowment effect is a cognitive bias where people place a higher price on things they own versus things they do not own. In fantasy baseball, this means that if you’re trading for a player that view as being worth $20, the opposing team’s owner could likely be valuing that player at say $25. Also remember that you yourself could be falling for this bias and viewing a $20 player you own as being worth $25. My advice for this would be to try and stay as objective as possible. Don’t look for evidence that simply supports your conclusion, which is a bias of its own, but look at all the quality information you have available. And if you feel that the other owner is overrating his player, there is a pretty good chance he actually is.

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Comments

  1. Andrew said...

    Love your work on risk, Victor.

    I had a question for you:

    In an auction setting, do you have any common strategies such as refusing to draft a $30 player in order to minimize risk?

    Or is this just an oversimplification and not necessarily the best way to minimize risk?

    Keep up the great work.

  2. Finn said...

    Going “cheap only” at an auction is a good way to minimize your risk. 

    This also makes it an excellent way to minimize your reward.

  3. Victor Wang said...

    Hi Andrew,

    Thanks for the kind words.  Finn does make a good point that such a strategy can minimize your upside.  Personally, I don’t set limits like I won’t draft a player over $30.  However, I tend to like setting a limit on how high I will go for an individual player.  I know some people like to say, okay this player is projected to be worth $30, but due to the errors in projections, it’s okay if I go a little over $30 to get him.  However, I feel it’s best to quantify the max range you’ll go for a guy.  If you don’t, you just leave yourself for the possibility of going higher and higher until you’ve spent way more than is rational, especially when you’re in the heated setting of a draft.

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