Markets in everything: non-simultaneous trades

by on May 15, 2009 at 6:55 pm in Sports | Permalink

Via Al Roth, here is an NBA example which makes my head spin:

"Here is a more complicated example of a legal non-simultaneous trade:
a team has a $4 million Traded Player exception from an earlier trade,
and a $10 million player it currently wants to trade. Another team has
three players making $4 million, $5 million and $7 million, and the
teams want to do a three-for-one trade with these players. This is
legal — the $5 million and $7 million players together make less than
the 125% plus $100,000 allowed for the $10 million player
($12,600,000), and the $4 million player exactly fits within the $4
million Traded Player exception. So the $4 million player actually
completes the previous trade, leaving the two teams trading a $10
million player for a $5 million and a $7 million player. From the other
team's perspective it's all just one big simultaneous trade: their $4
million, $5 million and $7 million players for the $10 million player. "

Michael F. Martin May 15, 2009 at 7:05 pm

This one deserves a diagram.

anonymous May 15, 2009 at 8:12 pm

Wouldn’t the other team also need to pick up a four
million traded player exception?

Christina May 16, 2009 at 1:20 pm

Can we have it in tabular form please?

TV stands November 10, 2009 at 11:45 am

I love your NBA example. Keep up the good work!

TV stands

tucson cpa January 11, 2010 at 9:52 pm

Whatever happened to playing for the love of the game? I mean, even the management was in it for the good of the game at one point. What happened?!?!

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