Monday, 10 January 2011

Football Pricing


Not much going on tonight in football, with just the Hercules v Atletico Madrid game of interest to me. The ratings have this as a strong draw, which is available at 3.55 on BETDAQ (I missed the 3.65). These picks are hitting at 37.5% for the season in La Liga, and 35.16% across all the majors (excluding the 'wacky' Bundesliga).

Yesterday was a bit of a nightmare, with nothing seeming to go my way. The PC avoidance strategy of backing 0-0 was tried in the Leicester City v Manchester City game, and of course lasted all of 22 seconds. Then I tried my hand at trading the NFL Wildcard games on BETDAQ, and got caught in both games for significant losses. For trading BETDAQ is just clunky to use. When you place a bet on Betfair, in the event that you want to cancel it immediately (as is often the case in American Football with its game changing 'penalty flags' for example), there is a Cancel Unmatched button right where you have just entered the bet, so it's a simple process. Not so on BETDAQ, where the quickest way seems to be to click on two buttons on the bottom right of the screen, which takes far longer ('far longer' being a relative term, but significant enough to have a negative effect). I wasn't helped by the fact that the Kansas City Chiefs and the Philadelphia Eagles were both very poor, but anyway, the result was a fair-size loss, but the lesson has been learned that for trading a sport like the NFL, BETDAQ is just not suitable. Time to move on.

Mouldhouse had another reply, which is worthy of inclusion in a post rather than remain tucked away in a comment that might be read by just me. He knows far more about the workings of the football markets than I do, and while the UK Betting Exchanges might be smaller fish than we sometimes think, I suspect that a wildly varying price such as Liverpool's at Blackburn Rovers last week is more down to fresh information becoming known, than because someone in Asia has a more sophisticated model than anyone else. As I wrote before, the price is going to be set where supply meets demand, and different markets are always going to be in the same ballpark. If the price is NOT where supply meets demand, then an opportunity exists, as I learned in Economics back in '73-75. Besides, only members (account holders) of Betfair are able to offer prices on Betfair. BP are traded on the New York Stock Exchange and in London, and no doubt several other markets too. Are the prices wildly different? Does news that becomes known in New York before London take long to impact the price in London? Anyway, here's the comment before I lose more money on the Hercules v Atletico Madrid 0-0 score!

"Prices on the exchanges reflect the opinion of members of the exchange. The price is where supply equals demand."

Nope, that's not correct. Watch the asian bookmakers prices, and watch when they change, and watch what happens to betfair a couple of seconds after. The pricesetters from there are beating the drum, and the betfair market just follows accordingly.

There's one supplier with a very fast bot that moves to the asian lines or into that spread within a couple of seconds.

In the recent premiership games the vast majority of teams traded in a very large range of prices. E.g for decent money Liverpool traded 2.3 - 1.87 away at Blackburn.

Did the opinion of the members on the exchange really change that much? At what point was this extremely liquid market "providing an accurate assessment of probabilites"? The same can be said of almost all the games the other night (last wednesday).

I know its nice to think that betfair is a massive market, and follow the EMH [Efficient Market Hypothesis], etc, but its just not the case I'm afraid. Hundreds of millions is being bet in asia where the prices come from, which filter down to Betfair, where a million or two is matched on a game pre-off.

I take positions in >50% of UK football matches and win money over the season. Not at the same ROI as F-E or even similar, but the absolute profit of course vastly exceeds his. How is it possible to make 5%-10% ROI over many seasons if the markets are even loosely efficient? Betting in over half the games is selective to a degree, but nothing like the degree which you are suggesting.

I'm afraid the sports markets are nowhere near sophisticated enough to be considered efficient as yet. The very successful stock investors (e.g. Buffett) show that the stock market as a whole isn't efficient as yet, although the EMH is a lot easier to "accept" there - sports markets simply have no chance, as yet.
PS: If the One Armed Trader would please e-mail me at calciocassini at aol.com I have the study on which my NBA Big Home 'Dogs post was based. Thanks.

5 comments:

TrUlster said...

Exactly. Betfair just follows the Asian bookies.

So then, why are you betting (exclusively, it seems) on betfair when you will in most cases get better odds and limits in Asia?

NICK said...

Mouldhouse is talking nonsense....

Jon said...

Nice opinion NICK. Will you be backing up your statement with any evidence? Would you care to elaborate on why Mouldhouse is 'talking nonsense'?

boycee said...

I keep hearing that the asian bookies move the market.

Which bookies are you talking about specifically?

Tylerrapi506 said...

While this subject can be very touchy for most people, my opinion is that there has to be a middle or common ground that we all can find. I do appreciate that youve added relevant and intelligent commentary here though. Thank you!