Saturday, 17 January 2009

Letting Go

Yesterday, I was following the NBA game between the Cleveland Cavaliers and the Chicago Bulls. Cleveland were pre-game favourites at (I believe) around 1.3, and after a strong start were backed as low as 1.09 for fairly big money (and as anyone who follows the NBA regularly knows, to back a team at this low a price in the first quarter of a game is not far short of crazy). 

36 minutes later and I had a nice profit locked in as a result.

The screenshot above was taken at the end of regulation, with the game set to go into overtime. Now it seems to me that if two teams have played 48 minutes against each other, and there are no issues with players in foul trouble or injuries, then the odds should be pretty much 2.0 on each team, with them possibly favouring any team that has made a big run to tie the game up, or indeed the home team.

In the above game, Chicago was the home team, and neither team was in serious foul trouble. As for injuries, it was Cleveland who were faring worse with West, Ilgauskas and Wallace all missing.

So why the heck were the Cavaliers still rated as 1.5 favourites? It made no sense to me, and my end of regulation lay proved to be profitable, as the Bulls went on to win the game.

It seems that the market sometimes just can't accept that the favourite can lose, and wakes up to the possibility a little too late. I'm not complaining though. I think whatever the pre-game probabilities on two teams are, going into overtime (with the above factors being considered) backing a team at anywhere close to 3.0 has got to be a winner.


Anonymous said...

Ive noticed this favourite bias within NBA markets as well although I must admit, that the overtime aspect is something Ive largely overlooked. A team that is 1.3 at the tip off but only level going into the start of the 4th (all other factors level/insignificant) will still be stubbornly around the 1.5-1.55 mark. The OT example youve given makes this even clearer to see.

If say a 1.7 fav starts a game badly and the outsider goes odds-on, you'll certainly see some demand to back/support the "new" fav. However, if the original fav makes a run back, the strength and size of the demand or "thirst" to back the original fav again is exponentially more (relative to the price.) In my experience, it usually means too much momentum is created leaving a fair overshoot before the prices settles down.

Cassini, regarding the Cavs/Bulls game, going into OT what price do you believe the Cavs "should" have been? For what its worth, Id price them around 1.76-1.8 although I didnt see the game and dont know if either team had made a huge run to cause OT in the first place. The 2.0 is definitely a good starter although I would price in that the Cavs would/should have more "big" game experience to close out a close game over 5mins.

In other words, I fully agree with your lay of Cleveland at 1.5 but if you would have offered me 2.0, Id have been happy to back them! :)


Cassini said...

Hi JPG - going in to OT, I had the game pretty much even. I knew the market would be clinging on to the Cavs so I was expecting 1.8 or so. When I saw 1.5, I really couldn't believe it. Bulls at home, Cavs with injury problems. I should probably just keep quiet, and cash in! Good luck.