2020 Financial Summary

• Trading volume of $2.5 million, an increase of 43.0% year-over-year
• Net returns from trading totaling $28,434, or 1.2% return on trading volume (“Trading ROI”). This represents a net return decrease and ROI decrease year-over year of -77.3% and -84.1%, respectively. Including cash back bonuses and promotional offers generated from our trades, our net returns were $51,299.
• Average position size of $2,434 across MLB, NFL, and NBA, NCAAM, NCAAF, CPBL, and KBO.
• Realized gains of $16,609 and unrealized gains of $29,936 related to transactions buying and selling Bitcoin (“BTC”) to fund sportsbook accounts.

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Volume and Performance

With a starting portfolio of $300,000, trading commenced on June 29, 2020 on ancillary markets such as KBO and CPBL. Due to COVID-19, the postponement of the start of the 2020 MLB season from March 26, 2020, to July 24, 2020 delayed any significant trading volume by four months. Despite an expanded playoff slate, the abbreviated schedule from 162 regular season games to 60 regular season games removed over 60% of available MLB games. As a result, our MLB trading volume decreased year-over-year by 14.1%. 

Our trading volume for the NFL, which played a full schedule of games, tripled year-over-year, growing 217.2%. Outside of the NFL and MLB, we traded $212,356 worth of volume on other sports in 2020, after trading only $718 in 2019.

In addition to the cancellation of games, COVID-19 also added a layer of uncertainty and complexity into our trading decisions. Last-minute lineup changes and diminished home field advantage may have negatively impacted our returns. For the MLB, most sportsbooks removed the listed pitcher option, meaning all trades were final regardless of what pitcher started the game. This forced us to have exposure on MLB games where the starting pitcher was a late scratch. Late player scratches were also an issue in the NFL. In one instance, we found ourselves with a position on a team that later announced every quarterback on its roster was disqualified from playing.

We benefited from an appreciation in the price of bitcoin, which is a required currency for transacting with sportsbooks from across the world.

Risk Adjusted Performance

COVID-19’s impact on our volume and returns introduced significant volatility into our 2020 betting performance. Benefitted by the appreciation of bitcoin, our portfolio generated returns of $89,642 on a starting bankroll of $300,000, representing a portfolio return on investment (“Portfolio ROI”) of 32.6%. 

Based on our daily closing portfolio balance, we estimate the annualized standard deviation of the portfolio to be 88.9%. Assuming an annualized risk-free rate of 1.0%, we estimate the Sharpe Ratio of our 2020 performance to be 0.36. 

Looking Ahead to 2021

Our expectation for 2021 is to increase our volume to $20 million, an 8X year-over-year increase from our 2020 volume. We expect our Trading ROI, inclusive of cashback bonuses and promotions, to be 5.0%. While this represents a significant improvement over our 2020 performance, we are confident that a return to normalcy in the sports world, combined with our continued R&D and innovation in finding new trading opportunities, provide a clear pathway for us to reach these goals.