Although the current status of the 2020 MLB season is still up in the air, it is never a bad time to consider investing in futures bets for America’s pastime. This week the ScoreMetrics Lab will look at the current odds for the World Series title and talk about diversified investment opportunities.
We’re still a little way off from competitive baseball, with the first games scheduled for the 26th of March, but things have certainly been eventful this offseason.
The Houston Astros sign stealing scandal has dominated the news cycle. Astros general manager Jeff Luhnow and field manager A. J. Hinch were suspended by the league and subsequently fired. Red Sox manager Alex Cora, who served as Hinch’s bench coach in 2017, also parted ways with Boston after the league’s investigation found him to have been integral to the Astros’ scheme. Meanwhile, the Yankees signed Gerrit Cole and took a leap to be an early World Series favorite.
How have these major storylines shaped the MLB futures market a couple of months before the beginning of the season? Let’s take a look at the current odds for the 2020 World Series winner.
|MLB World Series Winner 2020|
|New York Yankees||+400|
|Los Angeles Dodgers||+600|
|St. Louis Cardinals||+1600|
|Boston Red Sox||+1700|
|Tampa Bay Rays||+2200|
|New York Mets||+2500|
|Los Angeles Angels||+3500|
|Chicago White Sox||+4000|
|San Diego Padres||+4500|
|Toronto Blue Jays||+8000|
|San Francisco Giants||+12500|
|Kansas City Royals||+50000|
These lines are from BetStars as of the 29th of January 2020.
The odds given have variance between different bookmakers, but right now most seem to agree that the Yankees are the favorite for the title, followed up by the Astros and the Dodgers.
Besides the World Series, investors have opportunities in futures for the American and National League titles, and for divisional titles. One can also put some money down on player props or season win totals, but these could be considered to be speculative ventures that are more suitable for traditional gamblers. We’re looking to discover investment opportunities that have a good proven ROI over a long period of time.
Here’s one MLB World Series futures related statistic for investors to consider that the ScoreMetrics Lab discovered:
The bookmakers’ preseason favorite in January or February has gone on to win the World Series only once during the last ten seasons. The 2016 Chicago Cubs did it, but in each of the other seasons, an investment in the favorite would have vanished into thin air.
So, should we conclude that investing in MLB futures is not worth our time? Not so fast.
Earlier this year we talked about diversification in our previous article on the NBA’s Eastern Conference futures. Just like in the stock market, one can diversify and make less riskier investments in sports.
While a single investment in the Yankees winning it all this season looks like a bad move when looking at historical data, creating a portfolio of investments might prove fruitful.
For example, what would it look like if we picked five teams whose chances we like? Let’s say that we think that the title is most likely going to either the Yankees, the Astros, the Dodgers or the Braves, and that we think that the Cubs could be the most potential surprise candidate this season.
We could construct a diversified investment where we put money down on each of the clubs and return a profit no matter which one out of the five ends up winning the title.
Here’s one way to do it for a $1000 investment:
$350 on the Yankees to win at +400 ($750 ROI on total of $1000 invested)
$200 on the Astros to win at +550 ($300 ROI on total of $1000 invested)
$200 on the Dodgers to win at +600 ($400 ROI on total of $1000 invested)
$150 on the Braves to win at +1000 ($650 ROI on total of $1000 invested)
$100 on the Cubs to win at +2000 ($1100 ROI on total of $1000 invested)
Depending on the winner, the investment provides us with a ROI from 30% to 110%.
We want to stress that this is not a recommendation, but just an example of how a diversified investment could be built. The ScoreMetrics Lab always does a thorough analysis before making actual investments.
Stay tuned for more coverage on the MLB sports investment market as we move closer to the hopeful and anticipated start of the season!
The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.