Risk Management With The 3rd Pick (1 Viewer)

I realize that there have been numerous threads about risk and the top 3 running back threads (such as lebowski’s here). Many people feel that the third overall pick in the draft is great because they would be happy with any of the top 3 players that fall to them and then you also get a better second round pick. Assuming that this premise is correct and that you don’t have to pay too much to move up, I believe that right now is the perfect opportunity to trade up to the 2nd overall pick from the number 3. One caveat is that this would probably be more applicable in non-ppr leagues which would put Alexander’s value much closer to LJ and LT.

Obviously, you have to already know that you have the third pick and be in a league that allows trading prior to the draft. Also, you have to see a huge dropoff between the 3rd and 4th pick right now. Finally, the later you have your fantasy football draft, the more time you will have to benefit from any of this risk management strategy. Similar to the time value of financial instruments like put and call options, if your draft is in a week or two this strategy probably won’t be viable but if you draft as late as September then there’s much more value to it. The following is my argument when factoring in injury and performance risks for all three players.

Injury Risk: The NFL season is still almost 8 weeks away and training camp starts in about a week for most of the teams. There is a lot of football to be played between now and the beginning of the season. Even though Larry Johnson, LaDainian Tomlinson, and Shaun Alexander will be treated with kid gloves during this time frame, they still will all be subjected to carries, practice, and physical contact. I have no idea what the odds are that a player can get injured within the next eight weeks, but I’m going to guess that it’s at least as high as 5% and maybe more like a 10% chance. Now, when you apply that risk level to all three players I would think that there’s at least a 20-25% chance that at least one of them incurs some kind of injury that could limit them throughout the season. At a minimum, there is a decent chance that one will emerge that you do NOT want out of those three.

Performance Risk: These have been discussed in multiple threads, but this is another reason why one of these three running backs will demonstrate that you do not want him with your 3rd overall pick. To recap some of these potential performance risks, Shaun Alexander probably has the least risk with the biggest question marks being the loss of Steve Hutchinson and the addition of Nate Burleson and a healthy Darrell Jackson back in the mix. He had a career year and will most likely not be within 25% of the same number of TDs he had in 2005. Larry Johnson hasn’t had a full season under his belt yet, has a new HC and OC, the O-line is getting any younger, and last year’s starting fullback, Tony Richardson is gone. LaDainian Tomlinson has a new and inexperienced QB, quite a bit of mileage, and has been wearing down toward the end of the season the last couple of years. However you view these different risks is up for interpretation obviously, but there is a very good chance that one of these three players will show us something throughout training camp and preseason games that clearly makes them the least attractive option.

I’m not claiming to suggest that I can forecast injuries, but I really think that when you add all the potential risks together that those with the second pick will be in a much better position come draft day this year. In other words, I’m proposing that what you have to give up today to move up one spot in your league will be much less than the value between these two picks come draft day. There is a potential arbitrage opportunity here if you buy into most of my points. If you can get that spot relatively cheap, I think you should go for it. What say you?

I think it makes sense to trade up if either of the guys in front of you are offering to allow you to cheaply. Way too many posts by drafters claiming they prefer #3 because they are so wishy washy they can't make a decision between Top 3. Higher the better even at the Top 3...something (injury to them or others i.e. Roaf or Walter Jones goes down in preseason or just influenced by researching/deciding something for themselfs) should be decided by the drafter on a preference by draft time. Guys who don't want to make the call are guys too dependant on outside opinions ...they can't get a concensus from outside sources so they want to throw darts by having #3 and letting 2 other guys make the calls on who they receive at #3. Your point on avoiding risk by trading up now is very well worth it if you can do it at any reasonable price...and by reading posts it sure seems some believe #3 is worth nearly as much as #1 which it is not.

instead of making it specific to the 3rd pick, since many will jump in here with their Portis jerseys on, a more general question might be should you trade up to one spot above where you think the dropoff is to mitigate your risk. but then it all comes down to how much you're willing to/need to give up and is the dropoff big enough to justify it.

interesting topic.

edit to add: for example, i've got a big dropoff after 7 in ppr format. if i had the 8th pick, i might look to trade to 6 instead of 7, since the bigger the tier, the more chance one drops out between now and a late draft date.

instead of making it specific to the 3rd pick, since many will jump in here with their Portis jerseys on, a more general question might be should you trade up to one spot above where you think the dropoff is to mitigate your risk. but then it all comes down to how much you're willing to/need to give up and is the dropoff big enough to justify it.

interesting topic.

edit to add: for example, i've got a big dropoff after 7 in ppr format. if i had the 8th pick, i might look to trade to 6 instead of 7, since the bigger the tier, the more chance one drops out between now and a late draft date.

Click to expand...

Yeah, this is a good point and would apply in this case as well. My point is if you see a clear bucket or tier, it might behoove yourself to get an additional spot ahead of the end of it in case someone falls out of that tier due to either injury or poor performance in preseason games if it can be done rather inexpensively.