The system is probably too complicated for at least half the nation’s fantasy sports players, but ProTrade “will feed into the fanatical, obsessive types who are constantly looking to suck more entertainment value out of football,” said Fantasyguru.com publisher John Hansen, who has been following the fantasy sports craze for 11 years.
Kerns, 28, created ProTrade with 32-year-old Jeffrey Ma, an MIT graduate with a penchant for numbers and gambling. While still in college, Ma and his buddies became so proficient at counting cards in blackjack that they carted away millions of dollars from Las Vegas casinos, inspiring the best-selling book “Bringing Down The House.” (Ma is Kevin Lewis in the book).
The blackjack experience convinced Ma there are “analytical and quantitative ways to approach something that you normally associate with something emotional like sports,” he said.
Reflecting that philosophy, ProTrade is driven by an array of complex algorithms that crunch an athlete’s statistics to project future performance. The system, which draws on information provided by Stats Inc., also will offer real-time insights into the chances for a score before a play occurs in an actual game.
“It’s a pragmatic approach that more and more real-life teams are taking,” said Jeff Moorad, a former sports agent now general partner of baseball’s Arizona Diamondbacks.
Moorad is a primary investor in ProTrade, along with Kevin Compton, a Silicon Valley venture capitalist who is the principal owner of the NHL’s San Jose Sharks.
Although ProTrade hopes its traders make rational decisions, Kerns acknowledges that emotions are bound to enter the equation, just like the stock market.
For instance, if ProTrade’s market had been open during the NFL’s opening weekend of play, traders watching the New York Jets game might have been tempted to sell quarterback Chad Pennington as he fumbled six times — losing the ball twice. Meanwhile, traders watching the Pittsburgh Steelers might have been tempted to buy little-known running back Willie Parker as he rushed for 161 yards and a touchdown.
As it turned out, Pennington (ticker symbol: CPENN) lost $7.04 in dividends. ProTrade rated Pennington’s showing as the least productive of the opening weekend and hailed Parker’s as the most productive, awarding a dividend of $10.26.
Parker (ticker symbol: WPARK) earned another $4.99 Sunday after rushing for 111 yards with a touchdown, lifting his ProTrade value by 38 percent during the past five days to $21.17 per share among the few hundred traders testing ProTrade’s system before its official opening.
Despite last week’s letdown, Pennington’s stock fared well, rising from an opening price of $87.46 to $88.43 after throwing two touchdowns to earn a $2.43 dividend in Sunday’s Jets game — an indication that the ProTrade market expects the quarterback to turn things around.
Or perhaps the traders viewed Pennington as a bargain compared to Manning, whose $202.16 price after Sunday’s game ranked as the most expensive stock on ProTrade, even though he earned just 40 cents in the Colts’ 10-3 victory.
There’s nothing to prevent real-life athletes from participating in ProTrade’s market, although the NFL discourages its players from joining fantasy football leagues.
Former San Francisco 49ers tight end Brent Jones, a member of ProTrade’s advisory board, believes most players will stay away from the site.
“There are a lot of guys out there who aren’t going to want to see what they’re really worth,” he said.
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