I had spotted that Falkirk v Rangers was 0-0 at half time, but the mental note to do something in the second half got lost in my synapses. Until JB pointed out in chat that with 15 minutes to go Falkirk were 2-0 up. I duly laid them at 1.15, and went in again a few minutes later at 1.07 with a fair chunk. Unfortunately I had my traders hat on tonight rather than my punter's hat and greened at 2-1 only for Rangers to equalize a minute or two after I'd hedged my position. The draw was begging to be laid at 1.3 and so I obliged - for Falkirk to run out 3-2 winners. A return on investment of about 400% in ten minutes.
It almost beats working for a living sometimes..
Wednesday, 21 September 2011
Human nature, punters and tick size = profit opportunity!
Regular readers will know that I'm a big fan of laying with low liabilities. Given a team with an early two goal lead and you'll usually find me laying them in Match Odds and if feeling brave laying Any Unquoted in Correct Score. Neither of these trades are meant to be outright winners, but with the former a goal to the losing side usually results in a nice profit and with the latter time decay forces the price out surprisingly quickly as the market normally totally over reacts with respect to that scoreline.
I've been trading football on Betfair for some years now, and I've often thought that after a goal the price on 'Unders' drops more quickly than the price on 'Overs' rises only to dismiss it as an optical illusion. For those fans of low liability laying, liabilities don't come much lower than in the Over 1.5 market after an early goal has been scored and I've quietly made a few quid doing just that lately. I've also lost a few quid but that's not the issue right now! And I became more convinced than ever that unders drops quicker than overs rises - and - after thinking about it - reckon I know why.
In the premier league season 2010-11 80% of all matches had 2 or more goals, so an early goal leaves the Over 1.5 at very low odds. To see what this means have a look at the chart below. Let's assume the market settles at 1.1 to lay overs, and 11 to back unders. I've reversed the odds of the unders so that they correspond to the overs odds to give the closest to 100% combined implied percentage chance on both sides of the market.
The yellow boxes represent a perfectly matched market, with the implied chances adding up to exactly 100%. Notice that as the price rises on overs and falls on unders that the figure tends away from the perfect 100%. This is because on Overs at this point the tick increment is .01 whereas on unders it is either .5 or .2 on the prices shown.
The two red figures represent a £100 liability on both sides - i.e. a back of unders for £100 at 11 or a lay of overs for £1000 at 1.1. The two green figures show the hedged 'green' resulting from a one tick move on both markets. The astute trader would rather lay then back on those figures....
Or would s/he? Let's have a look at what actually happens. Imagine my surprise when I logged onto my trading PC on returning home from work to see the gooners 0-1 down at home to the mighty Shrews! Ignoring any personal preferences a Chelsea man has for the discomfiture of our North London rivals I thought this match might illustrate my thoughts perfectly, and so it proved! The screenshot below shows the 1.5 goals market after the goal:
Notice two things... firstly the market really does expect at least one more goal! I was able to back a tenner at 25 on unders! You can see my hedge lay already in place at 18.5. Secondly look at the discrepancy in the amounts waiting to trade overs compared with unders! I haven't added it up properly but it looks to be about £400 on unders and £15-16k on overs! This makes no sense really.... if you are convinced a second goal will come your back is sitting the queue at 1.05 or 1.06. You stand a good chance of a goal occurring before your back bet is matched! The brave soul who laid my £10 at 25 stood to lose £240 if there was no second goal, but he definitely got his lay matched!
This next screenshot was taken about three minutes later...
You can see my lay hedge has been matched, I'm the price of a pint ahead of the game, and overs has moved just one tick!
Human nature seems to move us in the direction of betting on something that we think WILL happen. So, with the above 80% stat in mind punters and traders alike back O1.5 at the start of the game, even though it is usually at an odds on price. With a goal early on the traders look to lay their backs off and secure a green book, free their cash up and go off in search of other opportunities. At 0-1 with over three quarters of a match between a premier league team and a lower league team many more punters will pile in with a straight back. The result is this log jam on O1.5 which will take time to clear. Watch these markets, in a big game (and with respect to Shrewsbury, this wasn't a BIG game!) you will see many thousands of pounds getting matched and queuing to be matched on overs.
In the meantime you'll see people like me over on unders sometimes nicking 5 or more ticks in the time it takes overs to move just one! The bigger green on a one tick hedge on overs doesn't now have quite the same appeal, does it?
I've said before that I'm not a mathematician, and I'm sure some people will correct my interpretation of the figures... but I know which way I'm going in this trade in future - all in favour of the larger tick size, quicker matching times and a fast buck!
I think it's only fair to end this post with a wealth warning....
"BACKING UNDER 1.5 GOALS, OR LAYING OVER 1.5 GOALS AFTER ONE GOAL IS SCORED CAN RESULT IN FINANCIAL LOSS! YOU HAVE BEEN WARNED!!!"
I've been trading football on Betfair for some years now, and I've often thought that after a goal the price on 'Unders' drops more quickly than the price on 'Overs' rises only to dismiss it as an optical illusion. For those fans of low liability laying, liabilities don't come much lower than in the Over 1.5 market after an early goal has been scored and I've quietly made a few quid doing just that lately. I've also lost a few quid but that's not the issue right now! And I became more convinced than ever that unders drops quicker than overs rises - and - after thinking about it - reckon I know why.
In the premier league season 2010-11 80% of all matches had 2 or more goals, so an early goal leaves the Over 1.5 at very low odds. To see what this means have a look at the chart below. Let's assume the market settles at 1.1 to lay overs, and 11 to back unders. I've reversed the odds of the unders so that they correspond to the overs odds to give the closest to 100% combined implied percentage chance on both sides of the market.
The yellow boxes represent a perfectly matched market, with the implied chances adding up to exactly 100%. Notice that as the price rises on overs and falls on unders that the figure tends away from the perfect 100%. This is because on Overs at this point the tick increment is .01 whereas on unders it is either .5 or .2 on the prices shown.
The two red figures represent a £100 liability on both sides - i.e. a back of unders for £100 at 11 or a lay of overs for £1000 at 1.1. The two green figures show the hedged 'green' resulting from a one tick move on both markets. The astute trader would rather lay then back on those figures....
Or would s/he? Let's have a look at what actually happens. Imagine my surprise when I logged onto my trading PC on returning home from work to see the gooners 0-1 down at home to the mighty Shrews! Ignoring any personal preferences a Chelsea man has for the discomfiture of our North London rivals I thought this match might illustrate my thoughts perfectly, and so it proved! The screenshot below shows the 1.5 goals market after the goal:
Notice two things... firstly the market really does expect at least one more goal! I was able to back a tenner at 25 on unders! You can see my hedge lay already in place at 18.5. Secondly look at the discrepancy in the amounts waiting to trade overs compared with unders! I haven't added it up properly but it looks to be about £400 on unders and £15-16k on overs! This makes no sense really.... if you are convinced a second goal will come your back is sitting the queue at 1.05 or 1.06. You stand a good chance of a goal occurring before your back bet is matched! The brave soul who laid my £10 at 25 stood to lose £240 if there was no second goal, but he definitely got his lay matched!
This next screenshot was taken about three minutes later...
You can see my lay hedge has been matched, I'm the price of a pint ahead of the game, and overs has moved just one tick!
Human nature seems to move us in the direction of betting on something that we think WILL happen. So, with the above 80% stat in mind punters and traders alike back O1.5 at the start of the game, even though it is usually at an odds on price. With a goal early on the traders look to lay their backs off and secure a green book, free their cash up and go off in search of other opportunities. At 0-1 with over three quarters of a match between a premier league team and a lower league team many more punters will pile in with a straight back. The result is this log jam on O1.5 which will take time to clear. Watch these markets, in a big game (and with respect to Shrewsbury, this wasn't a BIG game!) you will see many thousands of pounds getting matched and queuing to be matched on overs.
In the meantime you'll see people like me over on unders sometimes nicking 5 or more ticks in the time it takes overs to move just one! The bigger green on a one tick hedge on overs doesn't now have quite the same appeal, does it?
I've said before that I'm not a mathematician, and I'm sure some people will correct my interpretation of the figures... but I know which way I'm going in this trade in future - all in favour of the larger tick size, quicker matching times and a fast buck!
I think it's only fair to end this post with a wealth warning....
"BACKING UNDER 1.5 GOALS, OR LAYING OVER 1.5 GOALS AFTER ONE GOAL IS SCORED CAN RESULT IN FINANCIAL LOSS! YOU HAVE BEEN WARNED!!!"
Sunday, 18 September 2011
Trading is sometimes a question of hats
It's not that I have switched career from executive cars to millinery, but rather a question that you must make sure you are wearing the correct hat on before trading your own team! The hats in question today are the 'fan's hat' and the 'trader's hat'.
Manchester United at home to my team, Chelsea. I definitely entered this trade with the wrong hat on! Thinking that a poor Arsenal side flattered MU a couple of weeks ago and that their only match against strong opposition resulted in a hard fought draw during which they looked decidedly dodgy I carried full steam ahead with a Scatter Gun trade. To compound matters I laid U1.5 instead of U2.5 at 1-0 by mistake and got wiped out there by the second goal. Even then the old glasses definitely had a blue tint as I hung manfully on for a late 2-1. At 3-0 by half time the original trade was dead and buried and I only escaped with a modest profit because I took the 'tiger line' and laid Any Unquoted at about 1.3 for £100.
As an aside, laying the AU at 3-0 / 0-3 often pays off - I've said before I frequently do it and think it works for two reasons - first because it's a relatively low liability trade and one which I'm prepared to commit to for at least 30 minutes, secondly because I think most teams adopt a sort of 'job done' mentality at 3-0 and think the game is safe. I was fortunate in this match as Shrek missed a penalty! You won't catch me shedding any tears about that!
On a more positive note, I had my trader's hat on earlier in the day when I laid both Man City and Evian both of whom had two goal leads. Both games finished 2-2. It really is quite staggering how many 2 goal leads are let slip by teams these days.
I was of the opinion pre match that Fulham would test City, and thought at 1-0 and 1.24 that I was happy to oppose the sky blue Mancunians. My only regret was not doubling up on the trade when they went two ahead!
The situation with Evian was a bit different. They were playing Paris St Germain, who have spent the national debt of Brazil on new players this close season. Their two goal lead was not expected - and the odds reflected this fact. Depsite being at home they were 1.3 to oppose at the mid point of the first half time at 2-0. PSG got a goal just before half time, but rather than green it up there and then I decided to let the trade run until it was back to a scratch position and review it then. It was one of those bizarre games where for reasons best known to themselves Betfair suspended the market no fewer than TEN times before the equaliser went in.
Manchester United at home to my team, Chelsea. I definitely entered this trade with the wrong hat on! Thinking that a poor Arsenal side flattered MU a couple of weeks ago and that their only match against strong opposition resulted in a hard fought draw during which they looked decidedly dodgy I carried full steam ahead with a Scatter Gun trade. To compound matters I laid U1.5 instead of U2.5 at 1-0 by mistake and got wiped out there by the second goal. Even then the old glasses definitely had a blue tint as I hung manfully on for a late 2-1. At 3-0 by half time the original trade was dead and buried and I only escaped with a modest profit because I took the 'tiger line' and laid Any Unquoted at about 1.3 for £100.
As an aside, laying the AU at 3-0 / 0-3 often pays off - I've said before I frequently do it and think it works for two reasons - first because it's a relatively low liability trade and one which I'm prepared to commit to for at least 30 minutes, secondly because I think most teams adopt a sort of 'job done' mentality at 3-0 and think the game is safe. I was fortunate in this match as Shrek missed a penalty! You won't catch me shedding any tears about that!
On a more positive note, I had my trader's hat on earlier in the day when I laid both Man City and Evian both of whom had two goal leads. Both games finished 2-2. It really is quite staggering how many 2 goal leads are let slip by teams these days.
I was of the opinion pre match that Fulham would test City, and thought at 1-0 and 1.24 that I was happy to oppose the sky blue Mancunians. My only regret was not doubling up on the trade when they went two ahead!
The situation with Evian was a bit different. They were playing Paris St Germain, who have spent the national debt of Brazil on new players this close season. Their two goal lead was not expected - and the odds reflected this fact. Depsite being at home they were 1.3 to oppose at the mid point of the first half time at 2-0. PSG got a goal just before half time, but rather than green it up there and then I decided to let the trade run until it was back to a scratch position and review it then. It was one of those bizarre games where for reasons best known to themselves Betfair suspended the market no fewer than TEN times before the equaliser went in.
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