Thought Exercise - Football Tickets
Hey y'all,
I go to a non-target SEC school where football is huge. I am working all the home games in the skyboxes to buy a car and then to fund a portfolio. I bought the tickets knowing I could sell them for more (arbitrage, baby) and have begun looking for buyers. There is a student ticket exchange page where I am sourcing potential buyers, essentially a securities market.
This is a thought exercise I believe can be helpful both to you and me thinking through the ticket selling scenario.
My assumptions:
1. The tickets are somewhere between a long-only equity and a call only option. On one hand, only the tickets themselves can be sold, but the tickets have a negative theta because after each game the value drops dramatically.
2. Tickets can be sold in a whole package, a half package (freshman get only three or four games and I could split it and sell the other half), or individual games. That said, two particular rivalry games are worth significantly more than others (one in each half package), and four of the other five games are almost worthless.
3. The sale price lies between $250 and $400 for a package at this time. Some bastard posted for $250 on the low end, and someone off the exchange (dark pool?) offered my buddy $400. My negotiations have landed me around $300.
Now my speculations and questions:
1. What happens to the price as we near the first game at the end of the summer? I am guessing more people will be desperate both to buy and sell, increasing volatility, but I don't know which direction (if only I could take a delta-neutral position!). Which leads to its corollary, should I sell now or hold off?
2. Will it be more profitable to sell a whole package or half a package? Freshman I figure might be easier to sell to since they don't know the going price, but I also have to find freshman before the first game. I don't think individual games will work, given the low selling price of non-target games.
3. This is just for fun, can you think of a way to securitize tickets so you can short them and create derivatives on them? The man who can answer this one will be very wealthy indeed.
Thanks for answering!
