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CHICAGO — Lowell Bike has already scored a pair of tickets to see the Chicago Cubs play at Wrigley Field in two October playoff games and one World Series game, a bet that’s costing him $1,700 for events the luckless team may never play. 

He doesn’t actually have the tickets because they don’t exist. But he’s got options on them, meaning that should the Cubs go to the championship playoffs and then on to the series — and that hasn’t happened since 1945 — he has the right to pony up more money, or the face value, for the seats. The $1,700 is already spent.

He doesn’t even know which seats he may get to buy, though he knows they’re in the nosebleed upper-deck section.

It’s worth the risk,” said Bike, a transplant from Connecticut who grew up a Cubs fan, thanks to his father. “The market is so hyped for even regular-season Cubs tickets. It’ll be even tighter for the playoffs and I want to be guaranteed tickets.”

Who doesn’t? But some might say that putting up $1,700 for something that might never occur almost two months from now is a bit risky — or even stupid.

“You might get tickets cheaper,” said Lars Geary, a broker who sells tickets at the Tickets321.com site and on the steps of a pizzeria on Addison Street near Wrigley Field. “But if you want to buy a car would you just throw a bid on a red car?”

Bike bought his options, which could be considered mere reservations, through Firstdibz.com, a Chicago-based company that has recently created a trading market for tickets.

What the market will bear

Firstdibz.com led off its market with Cubs tickets in mid-June. It plans to bring on every other major sports team in September. Here’s how the business works:

Season ticket holders who don’t want to or won’t be able to go to all three division or all four championship playoff games or the potential seven Series games can sell the rights to their tickets at whatever price they wish through the site. Buyers purchase the rights based on what the market price is at the time. Like any market open for trading, the prices vacillate day to day, hour to hour, even minute to minute.

Bike, for example, bought his options last month when the upper-deck prices were $250 apiece for championship playoffs and $350 apiece for the first game of the World Series. By late Tuesday when the Cubs were five games in first place for the division, upper-deck playoff tickets weren’t available. The fourth-level tickets were running $450 each and the Series tickets in the upper deck were commanding as much as $1,750. But there weren’t very many of them available at any price.

On eBay, eight Cubs tickets to the first World Series game were selling for a whopping $59,999. Granted the tickets were good — section 202, left-field terrace — but they were the only ones available on eBay as of this week.

The closer the Cubs get to actually playing in those games, the higher the prices are expected to climb.

Firstdibz.com handles all the seller-to-buyer logistics — for a 10% commission on each transaction the seller makes and 7% from the buyer for each purchase.

“We’re an enabling platform,” said Rick Harmon, chief executive of Firstdibz.com, who said his company does not influence ticket prices. “We don’t make markets, we just enable markets. We’re a very neutral-position platform.”

Firstdibz requires the sellers to guarantee the tickets before they offer them for sale. The company promises buyers that they will receive tickets, even if the seller breaks the bargain.

“Theoretically, we’re not in the ticket business,” Harmon said. But if a season ticket holder can’t be found, he said, “We go into the market place and we will get similar or better tickets to deliver to the Dibz holder.”

Must take delivery

Another site, Yoonew.com, offers futures contracts on tickets to any game. For Major League Baseball games, however, the stakes are substantially higher for futures on Cubs seats with tickets to the first Series game in the same location at Bike’s, the upper deck, running more than $900 apiece.

Like a futures contract on crude oil or pork bellies, a buyer and a seller lock in a ticket price to erase uncertainty on both sides. Pork bellies, however, are never actually delivered to futures buyers. Tickets to a ballgame, on the other hand, must be.

Gerry Wilson, co-founder of Yoonew.com, takes the proceeds from all the futures contracts to buy the tickets promised at whatever the market commands ahead of the games.

“If the Cubs actually make it, you know those tickets are probably going to be worth upwards of $7,000, $8,000 maybe even $10,000 for the best seats in the house,” he said.

These guys really think of themselves more as insurance agents than tickets brokers. But those who buy and sell tickets for their livelihood consider such early bids on tickets, well, dicey.

“Who could even guess what prices would cost by then,” said Jim Bracey who operates the Thebestdarnticketstore.com.

“I don’t know why anybody would buy an option on tickets now,” he added. “The assortment available is going to be extremely limited. I would think that if fans waited a little bit until the tickets are released there will be a lot larger selections and they’ll know what they’re paying for the tickets.”

The options pros say ’stupid’

Max Waisvisz has been selling tickets to games and concerts and just about everything in between at GoldcoastChicago.com for two decades. “I think buying options is stupid,” he said.

“I believe in the real product and if you need to buy something you buy it,” he said. “If the Cubs make it, there the ticket is.”

Even professional options traders think paying that much for tickets with so many games left to play is overreaching.

“They’re buying an out-of-the-money call for a lot of money,” said Jon Najarian, co-founder of Optionmonster.com. “The tickets are about 50% overvalued at this stage. If this were mid-September, we’d be a lot closer and know more.”

“It’s like buying an option on a stock or a future,” he said. “If we were closer to the expiration (of the call), the fewer the days the companies have of screwing up.”

Cubs fan Paul Bartolotta thinks such contracts are akin to highway robbery. “I think the prices for this stuff have gotten totally out of hand,” he said recently outside Wrigley Field. “Whether you can afford it or not I think it just comes down to the principal of it.”

“I wouldn’t pay a ton of money and then have to pay an overcharge either,” he said. He’ll wait until the tickets are out and the games are only minutes away

“You can always come on the street and find a ticket,” he said. “The closer you wait until game time, the cheaper they get.”

Once-in-a-lifetime opportunity and then some

Bike is undaunted by all that kind of talk. “If you’re a diehard Cubs fan, Firstdibz is a good way,” he insisted.

And if the Cubs win the Series, something they have not done in 100 years?

“It may end up being a phenomenal deal if the Cubs get to the World Series. That’s the chance I’m taking,” Bike said.

It’s unlikely, however, that Cubs fans will be as fortunate as one New York Giants fan. According to Harmon, the long-time fan put dibs on Super Bowl tickets for $40 plus the face value long before the Giants were true contenders. By the time the team made it to the Super Bowl, scalpers were getting $3,000 and more for each ticket, he said.

The Giants, of course, beat the New England Patriots in one of the most exciting championship games in recent years, making that fan’s ticket, well, priceless.

“The way to do that is to get right out in front of a highly anticipated product or services or events, like a forward market,” Harmon said, acknowledging, though, that the “Cubs market is so unusual” because tickets for most regular games are hard to get at face value for those who don’t hold season tickets.”

“People’s anticipation to get that stuff or to be there is almost always more powerful than being there,” he said.

Tell that to fans who can’t get tickets.

Copyright © 2008 MarketWatch, Inc.