Thursday, 21 May 2009

It's A Kind Of Magic

I have finally, I think, recovered from the stress of trading this morning’s Cleveland Cavaliers v Orlando Magic game like a novice - novice here being a polite term for idiot.

One of my frequent strategies is to lay any team at short odds pre-game since the downside is limited, and it is rare for the price not to move higher, often significantly, at some stage of the game. However, the Cavs had a phenomenal record at home this season, dropping just two games (one of those being the meaningless final game of the regular season), and I just couldn’t see them losing. Mistake number one, never fall in love with a team.

The first half was one-way traffic with the price never going higher than the 1.23 SP, and at half-time did I lay off at 1.05? No. They were ahead by 15, had finished the half strongly, and I offered 1.04. No takers, although some money did get matched at that price – sadly not mine. Mistake number two – 1.05 is ok. The downside of waiting for that extra tick is huge.

The second half starts, and is again one-way traffic, but this time the traffic was coming from the opposite direction, and Orlando steadily erased the deficit. Did I lock in my profit while I had the chance? No. Having mentally prepared myself for a set amount, I didn’t want to take any less. Stupid. The 1.04 was long gone, and even laying at 1.12 or so would have been the smart trade, but I was in love with my position. Even when Orlando took the lead, the market still liked the Cavaliers. At this point I was red-all-over, including my face, but I have watched enough basketball to know that the pre-game underdog is the value in this situation.

A big lay of the Cavaliers looked like a mistake as the final minute saw the Magic with a two point deficit, but a late three pointer saved the day. Timeouts are wonderful for balancing the books, and I gave back some of my Magic profit to ensure that any late heroics from LeBron James would not leave me with a loss, and in the end it all worked out ok. Some stupid errors though, and I dodged a bullet.

As an aside, I did take a moment during the second half to check my pulse – it was 93! That can’t be good. Here’s hoping for a smoother ride on the Lakers – Nuggets game tomorrow.

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