From the team behind Normann, is a new fantasy trading site, StockDraft. Similar to popular fantasy sports sites, which let users create teams and win prizes based on their team’s performance, StockDraft applies that model for stock picking.
The platform works with participants entering tournaments and picking five stocks and one market index. Daily performance is converted into points which are used to rank tournament members. Like fantasy sports, players can change their chosen stocks before the start of trading of each day to catch active movers or to make a trade based on an upcoming earnings release.
Explaining to Finance Magnates what led to the release of StockDraft, Francis Larson, Founder of StockDraft stated, “We realized that mainstream users can’t be bothered to trade all day. They want to make a few trades, sit back, and then get immediate results.” Larson explained that this simple model has been “perfected by the fantasy sports guys.” He added that as a result, fantasy sports in the US has gotten to the point where nearly every male between 20 to 40 years old is familiar with fantasy sports.
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In launching their offering in the US, StockDraft aims to use the country’s interest in fantasy sports and leverage it for trading. Using the same model, StockDraft will be based primarily on daily competitions. Larson explained that due to the massive penetration of fantasy sports, there is a smaller barrier needed to educate users about how StockDraft works. This contrasts with other simplified short-term financial products like binary options, where user education is a key part of introducing them to new users.
While StockDraft is similar to demo trading competitions, what sets it apart is that participants pay in to enter tournaments and compete for the combined pot. In entering the paid trading tournament market, StockDraft hopes to succeed where others have failed to gain mainstream uptake for their products. Larson stated that he believed that in previous trading tournament platforms, users were still required to be good traders and watch the market. As a result, this inhibits weaker participant from wanting to continue playing new tournaments. With StockDraft, the goal simplifies the process where players don’t need to be actively trading in and out of the market.
Larson also explained that a key reason why paid fantasy sports tournaments are succeeding are the large potential payouts. As such, platforms like DraftKings are able to attract a critical mass of repeat users thanks to the potential of millions of dollars or yearly prizes for winning participants. In this regard, StockDraft’s goal is to create similar large pots, that will be able to attract recreational users, and make it worth their time to enter tournaments with $5 entrance fees. Larson added that he believed that the lack of sizable tournament payouts is what has hindered other trading competitions operators from succeeding in the past as users were more likely to lose interest.