The Benefit of odds movement.
 

Thought I might put together a small article on the hidden gems of odds movement and how it relates to value.

next post....

I am eagerly waiting for it.

I think you and I use very similar mindsets and strategies.

ugh, I just penned an hour long page and lost it by hitting the wrong button, oh the joys of progress :(

Well I won't go through the whole thing again, suffice to say in a nutshell....

Lay early for a fixed liability, wait for the team or player to drift or firm in the market and then back it just before the event.
You will look red on one side and green on the other.
The advantage is in the drift.
Over time, these drifts get out of hand as the market jumps all over the firming selection.

I got the data for soccer and took the odds at a certain time before kickoff, then did the trades just before the game. The longterm result was a massive profit.
Did the same on AFL, NRL, Tennis and Cricket.

Same method, same result.

I'd strongly suggest getting the data and running the simulations, it's mind blowing!

* I've been using this method on horseracing for the past two years successfully, however, australian markets have no liquidity early which sent me looking at sports in addition to UK markets.

CP this may be a stupid question but what about if the side you lay is the side that shortens?

This might sound like a dumb question CP, as I've got no experience with trading, but:
Don't you Lay low, Back high? It's just you say wait for it to drift or firm. If it firms, isn't that bad?

You use the term 'get the data', is that a feed into special trading software?

Maybe you can recommend a tutorial?

I need to start looking for new pursuits as I don't fancy being a Backer in the oncoming regime.
Cheers

No question is ever stupid, there are only stupid answers.

You still back it back and lock in the loss.
The number of times the market gets it wrong, compensates more than enough for those losses. Think of it as a strategy rather than this particular transaction.

We are backing and laying the movement not the actual team or the odds.

Get the historical data from betfair it's timestamped for sports, but gives first taken /last taken times for each odds increment.

Just pick a time before the event note the odds and then look at the last traded price before the event went inplay.

You get a pretty clear picture of movement and why it's profitable.

Basically what CP is saying is


At X mins to the start of a match or race you would try to lay a horse/team at the lower odds. ie if it shows $4.00 - $4.40 you try and lay at $4.00.

At 0mins to start you just trade out your position regardless of if the horse has increased to $5.00 or dropped to $2.00.

there are enough times where you get the movement go your way to disregard the times it doesn't.

The other thing I would suggest looking at it backing the teams/horses which firmed as you have a solid indication this is a good selciton that could win. ie trade out your loss and then throw a little bit extra on it in case it dos win which it usually will.

Keep in mind on AUS racing you are faced with the turnover tax. So stick to o/s racing and sports.

Cheers CP. I have read books on the subject, mostly USA, and even opened a myriad of betting accounts with offshore bookies a couple of years ago. BUT the more I researched the subject, I came away with the opinion that the smarties have it all sewn up on the odds and you'd be lucky to break even.

Fast forward to today, and you could say the same thing about AUS horse punting, but after a year of 12 hours a day research, loss and learning from my mistakes, I finally can make a consistent profit. So I'll just have to start on a new pathway.

Thanks for starting the thread.

You definitely want to get in early, rather than laying x mins to go, lay when the market is formed enough, usually a day prior, so you get the benefit of odds movement.

Consider two teams, no draw.

Team A is $1.32
Team B is $4.20

Lay them for stake $10 each

Odds sometime later...
Team A $1.27
Team B $4.60

Back them for stake $10 each

You are left with
Team A -.50c if it wins
Team B +$4.00 if it wins

You can see the odds advantage here.
Essentually you've layed team A at odds of $1.125 or backed team B at odds of $9.00

If you get my drift, regardless of this particular outcome, long term you're getting overs both ways.

*AFL Collingwood v Carlton was used in this example.

Thanks for the clarification CP, anything that can be used 24/7 interests me. Once i get my bankroll back up and running i'll have to look into it.

aaaah ok i think i see. so your laying both and then backing both outcomes just before the event and the price movements generally either way generally delivers a profit?

Yes, I came up with this because of the declining Aus racing liquidity early, and with daylight saving the UK racing scene was taking too much out of me. (always staying up longer than intended) and then being no good the next day.
There's enough sports going off around the world at different times to warrant picking and choosing.

Just be extremely careful of result driven markets.
In other words, performance in another event affects the odds in this event.
Like final 8 or premiers etc.

So lets do some real life examples:

AFL:

GWS vs Port Adelaide
Lay at $12.50
Lay at $1.08

Adelaide vs Melbourne
Lay at $1.10
Lay at $10.50

Brisbane vs Sydney
Lay at $4.50
Lay at $1.25

Carlton vs Collingwood
Lay at $6.00
Lay at $1.19

Essedon vs Bulldogs
Lay at $1.34
Lay at $3.75

That should do for a quick test.

Only Carlton V Collingwood is in play at the moment.
I posted the two odds before the game went inplay.

sorry yep I just went down the list and grabbed a few out. Exclude that one.

Lose .50c on the Collingwood result.

Will update trade prices from UB's list.

Hi CP, thanks for this but I'm probably missing something. Wouldn't the fave team win more often and wouldn't they normally firm therefore losing more often?

Are you talking about two team bets with no draws or do you also do this with drawers in soccer?

And what type of player markets are you talking about?

Sorry for the questions but it seems counter-intuitive (I didn't think I'd use that word this year).

One more question - do you take the lay bet available there and then or do you place an unmatched lay bet a few ticks away like UB said?

The fave team will win more often especially at those sub $1.30 odds.
But I lose .50c or win $4.00 based on the previous example.
Sometimes the favourite team does drift and the outsider firms.
I do this for soccer comprising a draw, tennis, NRL and sometimes cricket.
I only do Match Odds not sub markets, purely for liquidity purposes.

I can only urge you to either follow it here for a while or grab Betfair's sports data, to see the advantage.

Essentially I backed Team B Carlton @ $9.00 using this method, when the last traded price before the game was roughly $4.60.

Assuming that Betfair markets are accurate (prior to commission deductions) one has to make a profit.
Or I layed Team A @ $1.125 when the last price was close to $1.27.

Therein lies the edge, regardless of the frequency of odds on favourites getting up.

Soccer is great because I take the available lay price and then take the same stake on SP back.
Other sports don't have SP just yet, which makes for a problem when working lots of markets. I have a spreadsheet which I input the start time and make sure it's covered just prior to the start. I never let my bets go inplay and never set bets up a few ticks away.

Sometimes you miss out on a massive drift.

One drift was $2.60 right out to $4.20 and I missed out on that rare beauty.

I make sure my events are going to start the times I can be around at my computer or sometimes will just take the odds before I go to bed if the trade went on a day or more ago and it's two hours until the event etc.

Oh, another thing they must all be big matches, I never go for obscure soccer matches. There's got to be money either side, and a minimum market matched total.

Stick with AFL, NRL, English Premier League Soccer, big cricket matches, Open mens and womens tennis etc.
I don't do golf, darts or Formula 1.
Too many players, contestants.
I want a maximum of three possible outcomes.

Thanks CP. I will follow with interest.

This could now be backed at :

Back at $4.70
Back at $1.26

Now $1.25 and $4.90

Will be waiting until later.

Make it easier to list like this...

Carry Forward -.50c

GWS vs Port Adelaide 2.10pm
Lay at $12.50
Lay at $1.08

Adelaide vs Melbourne 4.40pm
Lay at $1.10
Lay at $10.50

Brisbane vs Sydney 7.40pm
Lay at $4.50
Lay at $1.25

Essedon vs Bulldogs 7.40pm
Lay at $1.34
Lay at $3.75

Note that at these short prices it will have to go more than one day unless of course there's a nice upset. Not uncommon to have either a weekend of clean sweeps or a weekend of a few upsets.

CP Where in BF do you get this data? I have looked but only found the nags and dogs

http://data.betfair.com/
Scroll down to other data.

You need to clean the files.
All in play is listed in there as well, including keep bets.
The way I do it is to make another field which flags greater than event start time and eliminate all flagged data.
I also eliminate obscure sports etc as the files are massive.

You cannot open them in Excel, you need to import them into Access or another type of database because there are millions of rows.

It really is silly that Betfair don't list keep bets matched (PE) in play as in play (IP), it would make life so much easier :(

CP Thanks
That will be a project over the next two months

Carry Forward -.50c

GWS vs Port Adelaide 2.10pm
Lay at $12.50 Back at $10.00
Lay at $1.08 Back at $1.11

Adelaide vs Melbourne 4.40pm
Lay at $1.10
Lay at $10.50

Brisbane vs Sydney 7.40pm
Lay at $4.50
Lay at $1.25

Essedon vs Bulldogs 7.40pm
Lay at $1.34
Lay at $3.75

Carry Forward -.50c

GWS vs Port Adelaide 2.10pm
Lay at $12.50 Back at $10.00
Lay at $1.08 Back at $1.11

Adelaide vs Melbourne 4.40pm
Lay at $1.10 Back at $1.09
Lay at $10.50 Back at $11.50

Brisbane vs Sydney 7.40pm
Lay at $4.50
Lay at $1.25

Essedon vs Bulldogs 7.40pm
Lay at $1.34
Lay at $3.75

CP,

Just an observation, but from my dart board random assessment of a few of these across multiple sports, it appears in 90% of cases the favourite firms (or stays the same) and the long shot drifts.

What is your feel for this ?

Carry Forward -.50c

GWS vs Port Adelaide 2.10pm
Lay at $12.50 Back at $10.00
Lay at $1.08 Back at $1.11 WON +.30c

Adelaide vs Melbourne 4.40pm
Lay at $1.10 Back at $1.09
Lay at $10.50 Back at $11.50 WON +$10 Get in!

Brisbane vs Sydney 7.40pm
Lay at $4.50
Lay at $1.25

Essedon vs Bulldogs 7.40pm
Lay at $1.34
Lay at $3.75

It's fairly even when you look at the amounts.
Often it will stay the same or firm a little, but when it drifts it compensates more.
So you end up a little better off laying first then backing.
But you are right by strike rate.

Carry Forward -0.50c

GWS vs Port Adelaide 2.10pm
Lay at $12.50 Back at $10.00
Lay at $1.08 Back at $1.11 WON +.30c

Adelaide vs Melbourne 4.40pm
Lay at $1.10 Back at $1.09
Lay at $10.50 Back at $11.50 WON +$10 Get in!

Brisbane vs Sydney 7.40pm
Brisbane Lay at $4.50 Back at $6.00
Sydney Lay at $1.25 Back at $1.19

Essendon vs Bulldogs 7.40pm
Essendon Lay at $1.34 Back at $1.32
Bulldogs Lay at $3.75 Back at $4.00

I'm trying to work out the profit on these. So this might help others understand it.

GWS vs Port Adelaide.
Lay at $12.50 Back at $10.00 = Back and Lay cancel each other out.
Lay at $1.08 Back at $1.11 WON +.30c = (10*(1.11-1.08)) = 0.30

Adelaide vs Melbourne 4.40pm
Lay at $1.10 Back at $1.09 = Back and Lay cancel each other out.
Lay at $10.50 Back at $11.50 WON +$10 = (10*(11.50-10.50)) = 10

Thanks for posting the prices.

Yep, thanks

Thanks to you two 'tag team champions'. Starting to get it now.

Yes, sorry I haven't given full calculations, I do this day in and day out so I forget that it does need a bit of explanation. Once you get the calculations, it just becomes automatic mental arithmetic.

Basically you don't need to work out any calculations for the losing side, only the winning side. It's just (back odds - lay odds) * stake (less commission)

For those who not use to betfair. The reason you don't have to worry about the losing side is because you layed it for $10. So you get back $10 because the team lost. You have also backed it for $10 to win so your winning on the $10 lay just pays back your losing of $10 on the back.

Its all simple when you understand it.