The Chicago Tribune recently had an article about fans who are paying options for Cubs post-season tickets, including $99 for an option to buy Cubs World Series tickets - which may or may not become a reality (the Cubs last went to the World Series in 1945).
The website, FirstDibz.com, acts as a middle man between the option buyer and the option seller (a season ticket holder).
If the Cubs do not go to the World Series, then the option buyer is out $99, and the seller gets the money (less FirstDibz.com's 17% cut).
If the Cubs do go to the World Series, then the option buyer gets the tickets, and is charged the face value price.
The buyer is risking the premium and, in return, gets a chance to buy tickets at face value that would cost a lot of money through ticket brokers.
Why would the season ticket holder sell an option rather than wait and sell the ticket through a ticket broker for more money?
Because, while they could get more money by selling through a ticket broker, that would only happen if the Cubs actually make it to the World Series. This way, they make money even if the Cubs get eliminated.
Tuesday, 5 August 2008
Options on Cubs Post Season Tickets
Posted on 15:02 by Unknown
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