Comparing CoinRoster Prices to Market Odds

This post is about trying to beat the odds on CoinRoster daily fantasy golf, a game where the fantasy points are determined based on score to par. The worst score to par becomes zero and each fantasy point is awarded based on the difference from the worst score. For example, if the last placed player has a real world score to par of +4 and the first placed player has a score to par of -10, then the first placed player will have 14 fantasy points. All other players are assigned a relative point value.  Six players are drafted to each roster, so the total score of each roster is the sum of the individual scores of all players on each roster.

My goal is to find some drafting strategies that take advantage of the difference between the price of golfers available to draft on CoinRoster versus the odds of betting on golfers to win the tournament.

The price of each player in the CoinRoster draft is relative to their world golf ranking. But I wondered how to determine whether this is a good price or a bad one? And which factors should I consider while attempting to make this determination?

I have compared the prices of the players available to draft with their odds of winning the tournament. I know from previous research that the odds of each player is related to their expected relative score to par.

I made a list of all players available to draft using excel with their associated price on CoinRoster, then I calculated the percentage chance implied by the prices of each players in the draft by taking their drafting price divided by the sum of all player prices. So if a player costs $3000 to draft and the sum of all players prices is $80,000, then this implies 3.75% ($3,000 / $80,000).

By finding this drafting price ratio, it gives me an “implied” percentage chance of each player having the most fantasy points based on CoinRoster’s drafting price. Then for curiosity’s sake, I converted those implied percentage numbers into decimal odds. The next thing I did was add a column of each player’s odds of winning the tournament and then I converted that into a percentage number also. Now I can compare apples to apples using their percentage chances.

With this information, I can eyeball and compare the odds numbers and the percentage numbers (which are the same value, but just displayed in different formats). I can also rank and sort the data in various ways using excel, so I subtracted the implied market percentage chance from the implied price percentage chance to uncover the difference between the two numbers.

By subtracting the two prices (the percentage chance implied by drafting price with the percentage chance implied in the player’s betting odds) I can notice if the price for a player available to draft is relatively lower on CoinRoster than is implied by their market odds. If the player is cheap and represents good value to draft their price on CoinRoster will be lower than implied by their betting odds. This means the player is cheap to draft, but if a player’s market odds are lower than their relative drafting price on CoinRoster, the player is expensive.

The table below shows the numbers for the BMW Championship. The table is ranked best to worst value.  Dustin Johnson has the best value for this tournament according to this formula. His odds were 9.36 (which implies a more than 10% chance he will win the tournament, and thereby have the best score to par) but his CoinRoster price was relatively cheap (even though he is the second highest priced player). Justin Rose, Rory McIlroy, and Hideki Matsuyama are also some of the most relatively best priced players.

Tiger Woods also has the third highest relative value to draft. This makes sense since Tiger’s world golf ranking (which the CoinRoster drafting price is based on) is relatively low compared to his chances of winning the tournament. So intuitively, this affirms my belief that I’m on the right track.

Some of the most expensive players on CoinRoster are Tyrrell Hatton, Alex Noren, Brian Harman, Kevin Kisner, and Peter Uihlein.

CoinRoster Price Implied % Implied Odds Market Odds Market % Diff % Cost
Dustin Johnson USA $2,839 0.0364 27 9.36 0.1068 -0.0705 $9,410
Justin Rose ENG $2,366 0.0303 33 15.70 0.0637 -0.0334 $8,368
Tiger Woods USA $979 0.0125 80 24.00 0.0417 -0.0291 $8,060
Rory McIlroy NIR $1,854 0.0238 42 19.00 0.0526 -0.0289 $9,769
Hideki Matsuyama JPN $1,372 0.0176 57 22.00 0.0455 -0.0279 $10,915
Bryson DeChambeau USA $1,797 0.0230 43 20.00 0.0500 -0.0270 $10,995
Jordan Spieth USA $2,058 0.0264 38 19.00 0.0526 -0.0263 $10,794
Brooks Koepka USA $2,688 0.0344 29 18.10 0.0552 -0.0208 $9,548
Justin Thomas USA $3,000 0.0384 26 17.60 0.0568 -0.0184 $7,905
Tony Finau USA $1,452 0.0186 54 32.00 0.0313 -0.0126 $5,840
Jason Day AUS $1,596 0.0204 49 32.00 0.0313 -0.0108 $5,068
Adam Scott AUS $812 0.0104 96 48.00 0.0208 -0.0104 $5,377
Patrick Cantlay USA $1,045 0.0134 75 48.00 0.0208 -0.0074 $5,254
Cameron Smith AUS $935 0.0120 83 57.00 0.0175 -0.0056 $5,010
Brandt Snedeker USA $680 0.0087 115 76.00 0.0132 -0.0044 $6,305
Rickie Fowler USA $1,905 0.0244 41 36.00 0.0278 -0.0034 $7,128
Emiliano Grillo ARG $689 0.0088 113 86.00 0.0116 -0.0028 $6,426
C.T. Pan TPE $801 0.0103 97 86.00 0.0116 -0.0014 $6,418
Jon Rahm ESP $2,230 0.0286 35 34.00 0.0294 -0.0008 $6,776
Bubba Watson USA $1,503 0.0193 52 52.00 0.0192 0.0000 $5,441
Phil Mickelson USA $1,203 0.0154 65 67.00 0.0149 0.0005 $5,889
Billy Horschel USA $681 0.0087 115 124.00 0.0081 0.0007 $5,417
Henrik Stenson SWE $1,159 0.0148 67 71.00 0.0141 0.0008 $4,963
Gary Woodland USA $895 0.0115 87 95.00 0.0105 0.0009 $4,210
Tommy Fleetwood ENG $1,951 0.0250 40 42.00 0.0238 0.0012 $3,880
Aaron Wise USA $731 0.0094 107 124.00 0.0081 0.0013 $2,691
Scott Piercy USA $227 0.0029 344 722.00 0.0014 0.0015 $2,810
Chris Kirk USA $406 0.0052 192 276.00 0.0036 0.0016 $3,978
Beau Hossler USA $565 0.0072 138 181.00 0.0055 0.0017 $4,269
Zach Johnson USA $762 0.0098 102 133.00 0.0075 0.0022 $5,207
Louis Oosthuizen RSA $850 0.0109 92 124.00 0.0081 0.0028 $4,835
Marc Leishman AUS $1,395 0.0179 56 67.00 0.0149 0.0029 $4,387
Abraham Ancer MEX $697 0.0089 112 171.00 0.0058 0.0031 $3,448
Webb Simpson USA $1,503 0.0193 52 62.00 0.0161 0.0031 $3,436
Ryan Palmer USA $390 0.0050 200 637.00 0.0016 0.0034 $2,399
J.J. Spaun USA $402 0.0051 194 589.00 0.0017 0.0035 $2,496
Jason Kokrak USA $456 0.0058 171 428.00 0.0023 0.0035 $3,531
Keegan Bradley USA $685 0.0088 114 200.00 0.0050 0.0038 $3,544
Brian Gay USA $466 0.0060 168 532.00 0.0019 0.0041 $4,034
Austin Cook USA $487 0.0062 160 475.00 0.0021 0.0041 $4,078
Paul Casey ENG $1,437 0.0184 54 71.00 0.0141 0.0043 $4,322
Ryan Armour USA $469 0.0060 166 646.00 0.0015 0.0045 $3,725
Rafa Cabrera Bello ESP $1,175 0.0151 66 95.00 0.0105 0.0045 $3,863
Andrew Putnam USA $510 0.0065 153 504.00 0.0020 0.0045 $3,466
Adam Hadwin CAN $731 0.0094 107 209.00 0.0048 0.0046 $3,715
Byeong Hun An KOR $840 0.0108 93 162.00 0.0062 0.0046 $5,258
Charles Howell III USA $607 0.0078 129 323.00 0.0031 0.0047 $4,986
Luke List USA $778 0.0100 100 190.00 0.0053 0.0047 $4,898
Si Woo Kim KOR $759 0.0097 103 209.00 0.0048 0.0049 $4,671
Francesco Molinari ITA $2,274 0.0291 34 42.00 0.0238 0.0053 $4,537
Andrew Landry USA $568 0.0073 137 551.00 0.0018 0.0055 $2,823
Jr. Potter USA $519 0.0066 150 893.00 0.0011 0.0055 $3,463
Brendan Steele USA $551 0.0071 142 675.00 0.0015 0.0056 $3,593
Keith Mitchell USA $625 0.0080 125 428.00 0.0023 0.0057 $3,691
Patton Kizzire USA $560 0.0072 139 808.00 0.0012 0.0059 $4,175
Kyle Stanley USA $1,208 0.0155 65 105.00 0.0095 0.0060 $4,514
Chesson Hadley USA $649 0.0083 120 428.00 0.0023 0.0060 $4,047
Brice Garnett USA $649 0.0083 120 561.00 0.0018 0.0065 $5,113
Ian Poulter ENG $1,109 0.0142 70 133.00 0.0075 0.0067 $5,284
Kevin Na USA $899 0.0115 87 228.00 0.0044 0.0071 $5,017
Chez Reavie USA $741 0.0095 105 475.00 0.0021 0.0074 $5,532
Patrick Reed USA $1,715 0.0220 46 71.00 0.0141 0.0079 $5,928
Pat Perez USA $820 0.0105 95 428.00 0.0023 0.0082 $5,436
Daniel Berger USA $842 0.0108 93 428.00 0.0023 0.0084 $5,661
Xander Schauffele USA $1,414 0.0181 55 114.00 0.0088 0.0093 $6,399
Peter Uihlein USA $1,137 0.0146 69 219.00 0.0046 0.0100 $7,100
Kevin Kisner USA $1,223 0.0157 64 181.00 0.0055 0.0101 $5,963
Brian Harman USA $1,045 0.0134 75 361.00 0.0028 0.0106 $82,801
Alex Noren SWE $1,580 0.0202 49 114.00 0.0088 0.0115 $81,756
Tyrrell Hatton ENG $2,115 0.0271 37 67.00 0.0149 0.0122 $80,176
$78,061 1.0000

Opening a FanDuel Account

Today I’m going to open a FanDuel account. My plan is to make a deposit and play PGA and NHL fantasy.

The first step to to enter your e-mail address, username, and password. Once I enter these credentials, FanDuel takes me to a page where I’m asked to choose my favorite sport. In my case, this is golf (and it seems like FanDuel assumes I only have 1 favorite sport).

The first thing I’m noticing right away is its been a few minutes after opening my account and FanDuel seems intent on prompting me to enter a free contest (which I’m not interested in, I’d rather just play PGA for stakes). So I quickly choose a seemingly random lineup of players and enter the free signup contest.

After hastily entering a free contest, I’m now ready to make a deposit. I choose the $100 amount and enter my credit card credentials. FanDuel users can also deposit using PayPal. But after trying a few different times, I was unable to make a deposit using either of these methods. I assume my credit card (visa) that could not be processed (as I tried paying with visa by way of my PayPal account also), I guess my card issuer might not process payment for FanDuel, I’m just guessing. But after I disabled the popup blocker from my browser and tried making a PayPal deposit debiting my bank account directly instead of my credit card, I was able to make a $100 deposit and receive a $20 deposit bonus.

How to price CoinRoster bitcoin pools

This post will describe how to use binary options to estimate the odds of a pari-mutuel pool. Friends of mine run a fantasy sports site called CoinRoster where they host pari-mutuel pools on a variety of topics including the bitcoin price. The CoinRoster bitcoin pools are fairly straight forward, users are presented with a binary question such as “will the bitcoin price be over/under a fixed price at a future date”. As the image below shows, at the time of writing, CoinRoster had a pool asking whether the price of bitcoin will be above or below $5,000 USD on February 1st 2017 based on the CME reference price. This pool closes in a few hours with the current bitcoin price is $6,352.

This is a simple market with two possible outcomes, the price will either be $5,000 and above, or below $5,000 as described by the pool’s terms. With the current price of $6,352, we can use a binary options calculator to determine the theoretical price for each outcome. We can even go a step further by converting the binary option price into an odds number format that you prefer, in the example below, I use decimal odds.

To start, let’s tally all the information we need to price the binary option:

Days Till Expiration 92
Strike Price $5,000
Underlying Price $6,352
Volatility 90%
Risk Free Rate 1.25%
Distributions 0

The days till expiration is the settlement date of the pool, in this case, the pool closes on October 31st, and settles based on the February 1st price, this is 92 days.  The strike price is $5,000 since this is the price that the pool uses to determine the outcome (either above or below). The underlying price is the current price of bitcoin, which is $6,352. To estimate the volatility, I used the average implied volatility rate for options on deribit.com, I chose a level of 90%.  I used a risk free rate of 1.25% and there are no dividends or distributions which might impact the price, so this number is zero.

Now we have all the variables, to determine the binary option prices, simply visit a free binary options calculator online and plug in the numbers, below is a screenshot.

With these variables entered, we get a result of a binary call price of 0.62 and a put price of 0.38. The first thing we should notice is since there are only two possible outcomes, the sum of call and put prices should be exactly 1.00. We should also notice that the call option is worth much more than the put option, this makes intuitive sense since the strike price is $5,000, while the underlying price is currently $6,352, making the call option “in the money”.

The binary option values can also be viewed as percentage chances, in other words, a binary option value of 0.62 is like saying there is a 62% chance of the outcome happening. To convert the binary option into an odds format such as decimal odds, simply divide 1 into the binary price = 1 / 0.62 =  1.612 or oppositely 1 / 0.38 = 2.63. Now we have an estimated price for each outcome in this pool, 1.612 for above and 2.63 for below.

In this example, the main variable that will impact the calculation is the volatility rate. We could assume different levels of volatility and get much different results. For example, instead of using a volatility level of 90%, if we used a level of 30%, the result would be binary prices of 0.935 call and 0.065 put. This makes intuitive sense since the less volatile the underlying is, the less likely it is to make big swings “out of the money” in this case, below $5,000 by February 1st.

The CoinRoster bitcoin pools are fun ways to bet on the price of bitcoin, whether you are hedging or speculating.