Today's results:
And the summary:
Saturday, 23 July 2011
LTD 22/7/11
A mixed day today, and one where the lay and leave approach weakens considerably. That said several of the games showing very small profits / losses could have been worked a lot harder in-play - and were I trading for real and not constraining myself by the terms of this exercise profits would have been a lot higher. There seems to have been more games than usual where the underdog takes the lead, and blindly trading out might not, in reality, always be the smartest move.
Today's results:
You will notice that I have changed the trade out position to decimal odds 2, and be assured that the results have been amended to include the extra £100 loss from the previous post as mentioned above.
And the summary:
One more day of this hedging after a goal then I'm going to try other methods to see how the results might be improved (or not, as the case might be!).
Today's results:
And the summary:
Friday, 22 July 2011
LTD Observations so far....
I had a couple of questions in my mind about yesterday's analysis of laying the draw.
The first, and most obvious one, concerned the merits of hedging across the board at 1.8 (or other odds, more of which later) or leaving the loss sitting on the draw to catch late wins. When I 'what if'd' my spreadsheet with a fully hedged bet the result, so I thought, was clear cut in favour of leaving the big loss on the draw. Two things now make me question this....
In a comment on yesterday's post Anon kindly pointed out that I had made a mistake on one of the losing games, meaning I was showing a loss of £100 instead of £200. That changed things slightly.
The second point to consider was that a late goal does not of course rule out a draw! Bearing in mind that the exit point is usually somewhere between sixty and seventy minutes depending on the game there is a lot of potential for a 'gotcha'. So, prudence dictates that one ought to lay the leading team after a goal to cover some, if not all, of the liability sitting on the draw. In a Polish game tonight the away team scored at 75 minutes. They were 1.3 or so to lay even at that late stage, so to cover a liability of £180 would have cost £50 odd.
Taking both these thoughts together I am now minded to hedge completely, take the loss like a man and move on!
Which brings me to my second question... what odds to bottle out of the trade at??
Talking about this subject in chat earlier on I encountered one of those little gems of information that belonging to a community of traders sometimes imparts. Jon, aka Lambretta, said I should look at the 1.8 odds because it takes only 3 minutes or so usually for the draw odds to drop from 2 to 1.8. Now I've never timed it, but Lamb's a stats man and I am totally confident that he is right... and it makes sense if you think about it. Evens (decimal odds 2) is a tick size change figure - i.e. the odds change from .02 to .01 per tick. That is why the draw (and other outcomes) hover around evens for quite some time as traders try to take advantage of that minuscule difference. Once the barrier is broken the odds fall away quite quickly. Now, if it's 0-0 at the time the draw odds reach evens the chances of a goal in the 3 minutes or so it takes for them to drop to 1.8 are tiny so it makes much more sense to use 2 as the trade out point.
So now I am at the crossroads again! Changing the trade out odds to 2 probably tips me back in favour of putting all the liability on the draw rather than on hedging... so I'm going to work on that over the next few days.
For the benefit of those who hadn't spotted it, there's a simple trade buried in that rambling paragraph above! Back the draw at evens for £100, hedge out three minutes later at 1.8 for a green of £11.11 or lay for £100 at 1.8 for a free bet of £20 on the draw! Simples!
The first, and most obvious one, concerned the merits of hedging across the board at 1.8 (or other odds, more of which later) or leaving the loss sitting on the draw to catch late wins. When I 'what if'd' my spreadsheet with a fully hedged bet the result, so I thought, was clear cut in favour of leaving the big loss on the draw. Two things now make me question this....
In a comment on yesterday's post Anon kindly pointed out that I had made a mistake on one of the losing games, meaning I was showing a loss of £100 instead of £200. That changed things slightly.
The second point to consider was that a late goal does not of course rule out a draw! Bearing in mind that the exit point is usually somewhere between sixty and seventy minutes depending on the game there is a lot of potential for a 'gotcha'. So, prudence dictates that one ought to lay the leading team after a goal to cover some, if not all, of the liability sitting on the draw. In a Polish game tonight the away team scored at 75 minutes. They were 1.3 or so to lay even at that late stage, so to cover a liability of £180 would have cost £50 odd.
Taking both these thoughts together I am now minded to hedge completely, take the loss like a man and move on!
Which brings me to my second question... what odds to bottle out of the trade at??
Talking about this subject in chat earlier on I encountered one of those little gems of information that belonging to a community of traders sometimes imparts. Jon, aka Lambretta, said I should look at the 1.8 odds because it takes only 3 minutes or so usually for the draw odds to drop from 2 to 1.8. Now I've never timed it, but Lamb's a stats man and I am totally confident that he is right... and it makes sense if you think about it. Evens (decimal odds 2) is a tick size change figure - i.e. the odds change from .02 to .01 per tick. That is why the draw (and other outcomes) hover around evens for quite some time as traders try to take advantage of that minuscule difference. Once the barrier is broken the odds fall away quite quickly. Now, if it's 0-0 at the time the draw odds reach evens the chances of a goal in the 3 minutes or so it takes for them to drop to 1.8 are tiny so it makes much more sense to use 2 as the trade out point.
So now I am at the crossroads again! Changing the trade out odds to 2 probably tips me back in favour of putting all the liability on the draw rather than on hedging... so I'm going to work on that over the next few days.
For the benefit of those who hadn't spotted it, there's a simple trade buried in that rambling paragraph above! Back the draw at evens for £100, hedge out three minutes later at 1.8 for a green of £11.11 or lay for £100 at 1.8 for a free bet of £20 on the draw! Simples!
Some thoughts on an old chestnut - Lay the Draw
One of the best things about betting exchanges is that they provide you with the opportunity to lay (oppose, or bet against) an outcome. Effectively you are providing someone's potential winnings, whilst scooping up their stake if their selection is wrong!
In a 15 horse race it is easier to pick a horse that won't win than it is to pick a winner, surely?? So why not just lay an outsider in every race and after a year retire to Barbados a multi millionaire? Sounds like a plan, doesn't it? The answer, of course, is that your potential liabilities are high. If you lay a horse at 14 / 1 for a £100 stake you will need to pay out £1300 if it wins. Ouch!
With a football match there are only three potential outcomes, and the odds on offer reflect this. One of the oldest trading strategies on the exchanges is to lay the draw. This is effectively the same as backing both teams to win. In the premier league just under a third of the matches are drawn, and unsurprisingly the draw odds at the start of a match are usually between 3.5 and 5 on Betfair. Blindly laying the draw is a guaranteed loser, but if we are smart and trade the draw it can be very profitable. The idea is to trade out of the match after a goal. This a) locks in a profit (or small loss) and b) frees your money up for another trade.
There are two major potential banana skins awaiting the draw layer. The first, and by a long way the worst, is the dreaded 0-0 result. The other is that the underdog scores first and the draw price doesn't move sufficiently to yield a profit, and in many cases will actually shorten as the market expects an equaliser.
As an academic exercise I have been paper trading laying the draw in a totally blanket fashion over the last few days. My brief was to hedge out once the market had settled as soon as the first goal was scored - simple as that. If no goal was forthcoming then I'd back the draw at odds of 1.8 for the same amount as I'd staked the lay for. If the match remained 0-0 there would be a heavy loss on the trade, but should a late winner arrive it would be a scratch trade. I conducted NO pre-match analysis and did no other trading during the game - so the results you see on the screenshots are really simplistic, idiot proof, trades.
This shot shows a summary of the individual matches:
This next shot shows a summary of the 31 matches 'traded' in this way:
Some interesting observations can be drawn from looking at these 31 matches, and I'll return to this over the next couple of days, but for now I'll close with a screenshot showing the breakdown of Premier League fixtures from the last season:
For now, just look at roughly how close a sample the 31 matches traded are in terms of home and away wins, draws and 0-0 games to a whole season of English top flight football....
In a 15 horse race it is easier to pick a horse that won't win than it is to pick a winner, surely?? So why not just lay an outsider in every race and after a year retire to Barbados a multi millionaire? Sounds like a plan, doesn't it? The answer, of course, is that your potential liabilities are high. If you lay a horse at 14 / 1 for a £100 stake you will need to pay out £1300 if it wins. Ouch!
With a football match there are only three potential outcomes, and the odds on offer reflect this. One of the oldest trading strategies on the exchanges is to lay the draw. This is effectively the same as backing both teams to win. In the premier league just under a third of the matches are drawn, and unsurprisingly the draw odds at the start of a match are usually between 3.5 and 5 on Betfair. Blindly laying the draw is a guaranteed loser, but if we are smart and trade the draw it can be very profitable. The idea is to trade out of the match after a goal. This a) locks in a profit (or small loss) and b) frees your money up for another trade.
There are two major potential banana skins awaiting the draw layer. The first, and by a long way the worst, is the dreaded 0-0 result. The other is that the underdog scores first and the draw price doesn't move sufficiently to yield a profit, and in many cases will actually shorten as the market expects an equaliser.
As an academic exercise I have been paper trading laying the draw in a totally blanket fashion over the last few days. My brief was to hedge out once the market had settled as soon as the first goal was scored - simple as that. If no goal was forthcoming then I'd back the draw at odds of 1.8 for the same amount as I'd staked the lay for. If the match remained 0-0 there would be a heavy loss on the trade, but should a late winner arrive it would be a scratch trade. I conducted NO pre-match analysis and did no other trading during the game - so the results you see on the screenshots are really simplistic, idiot proof, trades.
This shot shows a summary of the individual matches:
This next shot shows a summary of the 31 matches 'traded' in this way:
Some interesting observations can be drawn from looking at these 31 matches, and I'll return to this over the next couple of days, but for now I'll close with a screenshot showing the breakdown of Premier League fixtures from the last season:
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