Monday 16 April 2012

Related Markets

I think that most readers understand the logic that in football, the less probable that goals are, the more probable it is that the result will be a draw, but apparently not all.

(There's a reason why the draw is a lot higher a price in a sport such as Rugby or Aussie Rules).

Big Al is back, writing that
"If the market's expectation of total goals in a match changes, then other expectations change too - including the most important variable of the lot."
Well yes, that was kinda my point, but 'the other expectations' are that other markets will move in synch.

If the Under 2.5 goals price moves out, then the Under 3.5 goals price would be expected to move out, and the Correct Score 0-0 price likewise.

Big Al says:
Your claim that the draw price always has to drift when the unders price drifts is quite simply not true.

I have no idea if the price moves were correct or not in the match you mention, but your blanket statement is incorrect.
It would be a strange football pricing model where an increase in the input parameter of goal expectancy would result in a shortening of the draw price. Simply put, the 0 and the 1 scores that comprise much of the draw price are now less likely, and 2-2 draws or higher are a lot less frequent.

Unsurprisingly, Big Al once again fails to offer any ideas or evidence as to how such a divergent move could be explained (ruling out the Serie A end of season gentlemen's agreements of course) but I would be open to hearing any sensible thoughts to explain this strange behaviour. Am I on my own on this, or do others find the move unusual?

Coincidentally, A Football Trader's Path had a post on goals today - worth a read, especially the piece on how "goals beget goals" - a further complication when pricing up football matches.


BigAl said...

Congratulations on once again excelling yourself in misguided arrogance. And well done too for showing such ability to quote a remarkable amount of inaccuracies in such a short column.

Have a think about what may cause an under 2.5 price to move. And then think about what impact it may have on other parameters in this "strange football pricing model".

And once you've failed to see the obvious, pat yourself on the back and use up another column attempting to justify untruths.

Tony said...

Im with cassini on this one.

Does Al have a blog?