Aliens are more realistic than your team’s tournament chances

Hey there, sports fans!

It’s March, and you know what that means: nothing… for most of you, anyway.

Sure, the college basketball tournament begins today. And if you're a rich kid from North Carolina who makes out with his brother, congrats. Your team is in good shape.But if you're not pulling for a No.1 seed, your team's season is probably over, and you just don’t realize it yet.

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To be clear, it brings me no joy to point this out. I'd love to see some random school like Lipscomb (Is that a real school?) go all the way. But that's not likely to happen. So here's a realistic look at why your team is probably screwed, and how you might be able to make some money off them anyway.

This is an opinion, not financial advice. The views expressed are those of the author, who uses a pseudonym and cannot trade on the platform.

Since the current tournament format began in 1985, No. 1 seeds have won 64% of the time (25 championships).

No. 2 and No. 3 seeds have won around 13% (5 championships) and 10% (4 championships), respectively.

The remaining five championships, or 13%, are spread out among No. 4 seeds (2 championships), and No. 6, 7, and 8 seeds (1 championship each).

So if history is a guide, it’s not looking great unless your team is a No. 3 seed or better. And even a No. 2 or No. 3 seed isn't great.

But hey, as the lawyers like to say, past performance is not indicative of future results. There’s always a chance this year could be different. That’s why we play the games, right?

Wrong… at least according to the current Kalshi trader consensus. 

Currently, the chances of a No. 1 seed winning the tournament are at 73%. That means there’s still a 27% chance that one of the 60 other teams (aka the field) can pull it off.

To be fair, that’s a little better than 1 in 4, which isn’t horrible.

But when you drill down on the field, you’ll see that your specific team’s individual odds are much more bleak.

As mentioned above, there is currently a 27% chance that a team from the field wins the tournament.

But among the 60 teams in the field, only 12 of them are trading at 1% or above. That means our traders think 80% of the field (48 teams), have virtually no chance to win.

To add some context, NASA’s next scheduled human-moon landing isn’t until 2027. But traders currently price the chances of a manned NASA moon mission in 2025 at 1%.

So right now, traders price in a better chance that NASA will accidentally land some people on the moon than any of these 48 teams winning the tournament.

To be fair, that moon mission price is the result of traders who are trapped in the market because no one will buy their bags. So let's look at some other examples.

Compared to these teams winning the tournament, there’s a better chance that:

Is your team one of the 12 in the field with odds at 1% or better? Congrats! But your specific odds are still horrible.

Even the best team in the field is only trading at 5%.

To put that in perspective, Kalshi traders currently price the odds of the US Government confirming extraterrestrial life before the end of the year at 11%.

In other words, Donald Trump appearing on live TV alongside an alien is more than twice as likely as your school winning.

Alright, your team is probably not going to go home with the trophy. That's sad.

But you know what might cheer you up? A profitable trade.

Remember, this is not financial advice. Do your own research.

First off, you obviously don't have to make a trade on your team winning the entire tournament. Kalshi offers markets for every round:

But more importantly, you can still make money on your favorite team in our 'Tournament Champion' market even if they don't go all the way.

As I mentioned above, right now even the best No. 2 seed is only trading at 5%. But the odds of a team from the field winning it all are at 27%.

So, if you feel strongly that a specific No.2 or a No. 3 is going to make it deep into the tournament, now is a great buying opportunity. For example, let's say you buy 'Yes' contracts for Tennessee at 5% ($0.05), and they manage to make it to the next round. The odds of them winning the tournament will likely increase, as should their corresponding price.

Kalshi allows users to buy into and sell out of a market at any time. So you don't have to hold until your team is eliminated.

So even if Tennessee's chances only reach 10% or 15%, you can still manage to double or triple your money if you sell at the right time.

Obviously, you can also try your hand at trading long shots, like the No. 16 seeds. Buying in for just a penny or two can result in a huge payday with just a single win.

But there’s a reason No. 1 seeds are 154-2 against No. 16 seeds.  The odds of No. 16 seed Mount St. Mary making it to the second round is 3%, while the odds of Costco raising the price of their Hot Dog Combo for the first time since 1985 are currently at 14%.

In other words, it's very unlikely. So tread lightly, and enjoy the tournament.

Follow Terry Oldreal on X: @realOldTerryFollow Kalshi on X: @Kalshi

The opinions and perspectives presented in this article belong solely to the author, who is using a pseudonym and cannot trade on Kalshi. This is not financial advice. Trading on Kalshi involves risk and may not be appropriate for all. Members risk losing their cost to enter any transaction, including fees. You should carefully consider whether trading on Kalshi is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk. Information is provided for convenience only on an "AS IS" basis. Past performance is not necessarily indicative of future results. Kalshi is subject to U.S. regulatory oversight by the CFTC.