Baseball on PredictionStrike: How it Works
How baseball investing works:
At the highest level, baseball investing works just like our other sports. Player prices move based on:
- Supply and demand and
- Performance relative to expectations.
Baseball is very different from basketball and football, so we decided to improve the pricing formula to help PredictionStrike users.
The most common outcome for a batter in baseball is – by far – to get zero fantasy points. When we tested our original pricing formula against historical data, too many players lost value over the 162-game season. We had to do something to prevent that. We found a combination of ideas that worked perfectly against historical data: reduced fantasy projections, loss limits, and non-linear price movement.
I know that sounds like a lot, but we will explain here!
On reduced fantasy projections:
We decided to artificially lower fantasy point expectations for players. So, what does this look like in the PredictionStrike app? If your baseball player was projected 10 FPTS, we will show and use a much smaller number as his projected fantasy points. This makes it far easier for players to beat expectations and rise in price.
On loss limits:
This was the simplest user protection to add to our formula. We chose a limit that protected players from losing dramatic value, and over the full course of the season still provided users the greatest potential returns of any sport on the platform.
On nonlinear price movement:
Baseball is volatile. Our goal is for prices to move along a spectrum of percentages, not just hit the max gain or max loss. To improve the experience, we made price movement “non-linear”. What does that mean?
If an athlete beats projections, their stock will go up, that part is simple. Just beating projections is what matters most. However, a player beating projections by 50% won't necessarily rise twice as much as a player beating by projections by 25%.
MLB pricing formula update (4/20/2022):
Why we updated the formula:
Baseball has been live on PredictionStrike for roughly two weeks, and we have identified a few areas to improve the pricing formula for our users. In short, we’ve made the distribution of outcomes much more even! Instead of players usually going max up or max down, a player is far more likely to move evenly within the range of potential outcomes. Additionally, we’ve expanded the maximum percent change batters and pitchers (pitchers even more so because they play fewer games) can experience, meaning skilled users now can profitably day trade.
How we updated the formula:
- We expanded the maximum per game percent change limits
- 8% for batters
- 15% for pitchers
- We now include statistics and projections for BIPs (balls in play)
- These are rewarded with fantasy points
- This makes it far less likely for batters to get zero points and move down by the maximum percent change
- For this reason, you will see higher fantasy projections for every player in our app after this update
- Soon, you will see #BIPs projections on player screens.
We understand this is more complicated than our other sports’ algorithms, but these changes were all made to support our users and help them achieve profitable investing. Please continue to provide your feedback – as you know, this is all new! We’re constantly evaluating what the best way to do these things are, and they’ll only get better with your help.
The PredictionStrike Team