Friday, 9 January 2009

Level Playing Fields

When I wore a younger man’s clothes back in the 80s, I worked in the City of London for a merchant bank, and was exposed to the world of options trading. At first sight, it seemed an easy way to make some money, but of course it wasn’t. I soon discovered that theory and practice were two completely different things, and that however much I read and studied, there were always going to be plenty of people in these markets who knew far more than I did about the direction of a company’s stock price. And so I gave it up.

Winding the clock forward twenty years, and how very similar stock options are to bets on a sports event. Whereas a stock option will run for months, the time-frame is reduced for many sports events to a number of minutes. (As I have stated before, I don’t touch the horses or dogs because as in the financial markets, there are people who know far more than I do).

You can buy or sell a stock option the same as you can back or lay a sports selection. At the end of the term, your option and your bet both expire, either worthless or ‘in-the-money’, and during the timeframe you can re-sell your bet, or part of it, or you can add to your position. Information drives the prices of both, but whereas financial information leaks out to a privileged few before becoming public knowledge, an event occurring during a sporting contest is there for all to see at the same time. It is a level playing-field (pun intended).

It seems to me common sense that if one is serious about making money from betting, the very least you need is a fair contest. Why get involved in markets that can potentially be rigged, or where others know far more than you do? Markets such as Big Brother / Next Manager are deadly unless, of course, you are privy to inside information, in which case you have a very big edge and should use Kelly to maximize your advantage (and be prepared for jail if you are breaking the law).

I personally have nothing to do with any markets of this nature, and stick to sports, usually betting in-running. It never ceases to amaze me that people think they can take on the world at, say, trading currencies or betting horses, when they are obviously at such a big disadvantage. I guess it says something for the natural optimism of human beings.


Gus said...


Specials betting such as Big Brother is one of the few events in which you can know more than bookies by just researching thoroughly.

It is currently the easiest way to win in the world of gambling.

Admittedly, people who know more can harm you on Betfair but not do too much harm at the bookies plus the regulators have tightened things up a lot. It is a calculated risk you take.

Good luck (Verne at evens still looks an amazing bet to win)


Cassini said...

Agreed. I was talking specifically about exchange betting, where unless you are in the know, you will be at a disadvantage competing against those who are. I wasn't thinking about bookies, but good point.

Anonymous said...

I agree with you Cassinni.

I was actually tipped of about a manger market a couple of years ago.

I passed the tip onto the betfair forum. one betting firm took a lot of large bets. They were odds against as the price on bf dropped to 1.3.

Apart from that occasion I would never touch next manager markets.

Sometimes they go on for months and years and can take over your life.

Best avoided.

Anonymous said...

A perfect example is going on right now on the Quatar Open Winner market.

Cassini said...

That's great to get solid inside info on the Next Manager Market. I know people joke about Harry Redknapp having a bet on these things, but seriously, if you knew you had been offered the job, or were the chairman (or close relative / friend) of the club involved, why wouldn't you make a little extra. Highly unethical of course...

Anonymous said...

I am sure 'arry never had a penny on it.