Binary Ladder Contracts
All-or-nothing contracts on a player's WAR Index at laddered strikes. Simple enough to quote as a probability, liquid enough to trade all season. Designed for listing on a CFTC-registered Designated Contract Market.
The mechanics in thirty seconds
A binary Call pays $100 if the player's final WAR Index meets its strike, $0 otherwise; a Put is the mirror. Prices quote 0–100, so a Call trading at 42 is the market saying “42% chance.” Max loss is what you paid. No leverage, no margin calls, no unbounded downside.
Worked example: Bobby Witt Jr., 2027 season
Witt's five-season index history runs 0.9, 4.3, 9.6, 7.1, 4.8* (*2026, in progress). The ladder brackets his realistic outcome range. Hypothetical marks are anchored to empirical base rates: among all post-1947 players coming off three consecutive 6.5+ index seasons — Witt's profile — 84% cleared 4.0 the next season, 64% cleared 6.0, and 36% cleared 8.0 (155 comparable seasons, 62 players):
| Contract | Meaning | Price | Implied probability |
|---|---|---|---|
| Call 4.0 | Healthy everyday season | 84 | ~84% |
| Call 6.0 | Star season | 64 | ~64% |
| Call 8.0 | MVP-candidate season | 36 | ~36% |
The ladder self-polices: if Call 6.0 ever trades above Call 4.0, that's free money for arbitrageurs, so monotonicity is enforced by the market rather than by rule. Spread positions — long the 4.0, short the 8.0 — express “good but not great” views with defined risk, and that's where secondary volume concentrates.
Three horizons per player
| Horizon | Underlying | Role |
|---|---|---|
| Seasonal | One regular season | The volume product; re-lists annually |
| Multi-Year | Summed index, e.g. 2027–29 | Bridges retail flow toward swap tenors |
| Career | Cumulative career index | Long-dated “store of value” — will Ohtani's career index cross 100? |
Deliberately scarce
Liquidity strategy is concentration: eight watchlist players at launch, three to five instruments each, two to three strikes per ladder. Every listed instrument is enumerated in a version-controlled instrument matrix. No long tail of dead markets.
Edge cases settle themselves
- Injury or demotion: the index accrues as realized; a lost season is a low final value, not a dispute.
- Trade: stints sum — a non-event.
- Shortened season: ≥100 team games, contracts settle on realized values; fewer, contracts cancel and premiums return.
Full settlement procedure: methodology.