Liquidity Index Revisited

Does pre-draft panic tell us anything?

Source: Yahoo Sports

A few weeks ago, I introduced the concept of a Liquidity Index (LI) for dynasty fantasy football. It aimed to solve an issue with player value as defined by KeepTradeCut (KTC), whose trade values are used as a reference point by most dynasty managers.

The problem in question was the frequent disconnect between a player’s nominal KTC value and his actual worth. Even though Jermaine Burton is theoretically worth a fourth-round pick, for example, I doubt you’d get a leaguemate to bite.

This leads us to the formulation of Liquidity Index. If we divide how frequently a player was traded by his KTC value, then we can hopefully get a better picture of how desirable that player really is.

\(LI = \frac{ Times\ Traded}{KTC\ Value}\)

My analysis of Liquidity Index specifically focuses on second-year players, with our scope being the first three weeks in April, before the NFL Draft. This is because these players are some of the most volatile—and therefore most interesting—assets to hone in on.

The NFL Draft, of course, is a major reckoning for the previous year’s draft class, who risk being supplanted by rookies. Liquidity Index is, in large part, capturing these concerns, ones that often lead to a pre-draft trade frenzy. Our goal, then, is to see if it can tell us when this panic is justified, and when managers should cool their heels.

Historical Liquidity

Let’s start by looking at second-year players from the 2022 through 2024 classes. Note that our Liquidity index cleanly fits onto a 0-100 scale. This is because, for each draft class, we divide our initial LI values by the by the highest Liquidity seen that year.

The end result tells us whether a player was traded more (or less) often than we’d expect a player of their value to be, ahead of the NFL Draft. Tank Bigsby stands out, for example, because 73 trades is heavy activity for a guy whose KTC value is just 2500. Tank Dell also ranks highly; while we’d expect a player whose value is over 6000 to be a hot commodity, being traded 173 times is still a ton.

One notable exclusion is Rashee Rice, who, if we left him in, would’ve broken the scale. Rice was traded a staggering 346 times in April 2023, exactly double Tank Dell’s number. He’s exactly who you’d expect to have a hot trade market, in that any sellers would be more than happy with their massive ROI. Buyers, meanwhile, understandably salivated at the chance to own a potential WR1 for the Chiefs.

The 2024 Class

We now revisit the 2024 draft class, which I covered previously. Even though my data now comes from a larger sample, our most liquid players are still all running backs and receivers. This is likely because those are the positions most likely to face new rookie competition, something we’ll touch on in the next section.

The least liquid players (found by tabbing to the right) also make sense. You’d have better luck, for example, selling beach front property in Kansas than offloading Jermaine Burton in 2025. Brock Bowers, by comparison, exists on the other end of the spectrum. While he’s obviously quite valuable, few people are willing to move him, and it’s hard to put together a package of sufficient worth to acquire him.

Impact of the 2025 Draft

We now know which players managers were concerned about heading into the 2025 NFL Draft; the question is, does it matter? If this pre-draft panic was justified, then we’d expect the players with the highest Liquidity Index values to see their KTC values fluctuate wildly post-draft.

The results are somewhat mixed, though the biggest post-draft value drop-offs are hardly surprising. Of the 2024 class, for example, Tyrone Tracy had by far the highest liquidity index, and thus the most overheated market. Managers’ concerns turned out to be justified, even if Cam Skattebo is far stiffer competition than many would’ve expected.

Notably, there were very few significant value spikes post-draft. You can sort the above chart by Value Delta (rightmost column) to get the players who gained the most value; if you do, you’ll see Isaac Guerendo is our only real success story.

On pre-draft panic

It isn’t shocking, of course, that last year’s rookies often lose value after the NFL Draft. If a team drafts competition for breakout rookies—as was the case for Tyrone Tracy or Jalen McMillan—then those same prospects should decline in value.

The chart above confirms this, showing that many second-year players saw a post-draft value dip. The median player is expected to lose roughly 100 points of KeepTradeCut value, excepting QB’s, who remain unchanged. This may be because the same factors hurting position players—like increased competition—mean the opposite for QB’s, who instead get new weapons.

Let’s now take a more granular look at the draft’s impact on last year’s rookies. In short, we want to see if high pre-draft trade activity implies a drop-off—or perhaps even an increase—in a player’s post-draft valuation.

We first see that if a QB is being traded heavily pre-draft, it bodes well for their value after the draft. This mostly implies, however, that high-trade-volume QB’s are more likely to maintain value, and not necessarily gain it. The opposite is true of tight ends, where a high Liquidity Index pretty strongly implies a value drop-off.

Where Liquidity Index falls short is with receivers and running backs. While LI is still our best metric for predicting receiver value changes, its correlation of -.1 is far below the stronger relationships we see for QB’s and TE’s. The correlation for RB’s is even worse at -.04, suggesting we may need to attack the problem from a different angle.

LI and Future Value

Unfortunately, our analysis so far hasn’t produced anything actionable for fantasy managers. While it’s good to know that the NFL Draft is a harbinger of doom for last year’s rookies, our goal is to find assets that will appreciate, and not fall off a cliff.

What if we instead looked another year out? We’ll still use the same data as before, collected roughly a full calendar year after players were initially drafted (that is, after their rookie seasons have concluded, but before the next NFL Draft). From there, we’ll attempt to predict how their values will change over the course of their second season.

The results are mildly positive: Liquidity Index exhibits decently strong correlations with these sophomore-year value shifts. At the very least, Liquidity Index is largely an improvement over its component variables, KTC Value and Trade Count.

It’s also nice to see how much better Liquidity Index is at predicting running back value, which it previously struggled with. We can now say that if an RB was heavily traded after his rookie season, he’s fairly likely to increase in value the following year.

Year-two breakouts

Let’s look at some concrete examples to bolster our analysis. At a glance, it looks like many RB’s saw a huge value increase over the course of their second year in the league. Notably, many of these players boast a high Liquidity Index, too, meaning there were significant concerns about their long-term viability heading into year two.

The lesson here is that some patience is warranted with rookie running backs as they enter their second year. The reward is very real, if you can stomach the risk. Thus, buying RB’s before the draft from panic-selling owners might be a savvy move.

Tight ends also seem to be great long-term investments, but the results are actually catastrophic. Many apparent jumps in TE value are, in fact, coming from fantasy nonentities, like Darnell Washington. While Trey McBride is a tantalizing success story, he was likely just underrated before his second-year breakout, given his excellent prospect profile.

While second-year tight ends are clearly subpar investments, quarterbacks might be even worse. In fact, we’d expect a QB to lose nearly a thousand points of value over the course of his second year in the league, which is a truly drastic drop-off.

Is this information terribly useful? Probably not; the 2022 class was known to be awful going in, and the the classes bookending it aren’t faring much better. If anything, it suggests prospect pedigree might matter more for QB’s than any other position, and that chasing the next Dak Prescott—or even Jalen Hurts, for that matter—is a fool’s errand in 1QB formats.

Closing Thoughts

The main takeaway from all this is clear: most players lose value over time. While that seems strikingly obvious, it still bears repeating.

This is especially true after the NFL Draft, when many of last year’s rookies find themselves facing new competition. As a result, the draft is often a catastrophe for these players’ values, with many seeing huge declines. Only quarterbacks see their value remain steady, though they don’t benefit from much of an increase, either.

Don’t let that fool, you, though, as quarterbacks are some of the worst long-term assets out there. QB and tight end values often plummet over the course of their sophomore seasons, with few success stories to be found in our data. Even accounting for small-sample issues, the risk-reward profile of these positions is fairly grim.

Running backs, by comparison, offer a far sunnier outlook. If there’s one actionable insight I can give dynasty managers, it’s to buy the dip on RB’s entering their second year. There’s nuance to this, of course—I don’t think acquiring Tyrone Tracy right now would be a particularly inspired move—but the research I’ve done in this article backs up the fantasy community’s RB-first mentality.

As for receivers, the story’s a bit murkier, the relationship between trade activity and receiver value being noisy at best. Your best bet is probably to lean on predictive metrics as researched by Ryan Heath instead, given how strongly many of those variables correlate with next-season scoring.

Hopefully all this has been helpful; if you liked my analysis, hit the subscribe button (it’s free!) and comment away with any lingering questions or concerns. I can be found on both Bluesky (capn-collins.bsky.social) and Twitter (capn_cc), too, for anyone who wants to connect.