Wednesday, 29 January 2014

Bidder Taste

With the Premier League making way for the FA Cup this past weekend, I'm saving the FTL update until after tonight's matches. One FTL entrant did try to sneak in a couple of FA Cup selections, but unfortunately there are no official prices on the Football Data web site so they are invalid. 

One selection was for Crystal Palace to win at holders Wigan Athletic which, not surprisingly, was a losing bet anyway. Do some people not realise that 'we' are focusing all our efforts on finishing in 17th place (or higher) in the league, and have no interest in "doing a Wigan"? And I'm not sure 'we' meant to win at West Bromwich Albion in the Third Round for that matter. Either West Bromwich Albion are worse than we all think, or they are so concerned at the possibility of relegation that they put more effort into losing! 

While we are talking about relegation, Crystal Palace traded as low as 1.08 to go down. Their price now? Around 2.4.

On to more serious matters, and the debate on court-siding rumbles on. There is, in my view, a dangerous belief that the presence of court-siders is of minor consequence, and might even be a help! I understand that some people have an agenda here, but to me it makes no sense. 

Here's Dynamic Tennis trading (via Sports Trading Life's) idea:
Therefore, you need to adapt your trading style. I trade tennis by taking positions in between points and with a short term view of getting out after a certain amount of points. I take up what I believe to be good value positions within a tennis match based on how the events are unfolding and how I feel the markets will react.
Except that this assumes the court-sider, or more accurately the trader with the advantage of being first, is happy to leave value behind. It is simply not possible to bet at poor (i.e. negative) value and make a long-term profit. And there is competition for the value left behind too.

Yes, I do understand that you could make a profit, but the odds are against it. [Unless your name is Emp of course].

Consider someone who is into buying up cars at auction. They might have an expert eye, but then so do lots of other people, but imagine that before the auction, one of your fellow car dealers has a word with the auctioneer, and says "I'll give you 60% of my profits if you let me have a mechanic take a look under the bonnet, and you don't let any of these other sods near it".

Assuming the mechanic knows his stuff, how are you or any of the 'blind' traders ever going to make a living from this? If you get to "win" a car, it's because the "seeing" trader let it go at that price. And yes, we all know that an auctioneer often looks forbidding...

Sports Trading Life continued:
Tennis Trading for the home trader these days is more about match reading and having a “feel” for the markets then anything else. If you can spot when certain players are likely to have a dip or feel the pressure then you can trade tennis profitably and it is a skill that is developed with time. If you believe your tennis trading edge is simply getting into the markets before anyone else then you have to go courtside and this seems like a tricky proposition.
"IF" you can spot... That's a big IF. While tennis isn't a sport I care for too much, it seems to be popular with many traders, and it is those people you are competing against. As with trading football, it seems unrealistic to think that you are the best reader of the game out there.
Look to trade by taking positions based on the match so far. Read the match and trade that way. When you do trade like this, courtsiders are actually a help since you see the markets move before the point is scored on TV. This can give you a few extra seconds to make your next decision while other home traders might be still making their decisions. Courtsiders also help provide the amazing liquidity you see on some matches. These guys are trading with 5-6 figure stakes which makes more money available to be won.
The markets moving before the point is seen on TV is one reason why I don't trade tennis. For one thing it is very annoying! As for the idea that you can somehow use the court-siders (and associates) move to plan your next move, really? Even if you knew that the fast-data trader often leaves a little value behind, there are likely to be hundreds of 'home' traders fighting over those scraps. While confidence in a trader is a good thing, I think a semblance of reality is useful too. And those 5-6 figure stakes are not charitable donations. They may well be won on occasion, but again, long-term, no - unless the fast-data trader is useless of course.

Back to my car auction analogy, and what is going to happen after a while? The 'blind'traders, assuming they have any sense, will soon get tired of buying what turn out to be crappy cars at too high a price and get frustrated at not being able to buy the better cars at a price they can make a profit from, so they go away. Occasionally a new guy shows up, but doesn't stay for long, certainly not through to the bidder end, and the auction business suffers because car sellers move to selling their cars elsewhere realising that an unfair auction means poor prices for them.

My analogy might not work if the 'bought advantage' is only good for one auction - no one really notices perhaps, or accepts it as one of those things, but are traders really going to be so accepting of the likes of Sporting Data and their admitted employment of six people to travel the world and getting a persistent advantage?

It's also true that auctions, like casinos, are entertainment, and if you're there for a bit of fun expecting to pay a price for that fun, that's fair enough. I'm just concerned that articles like Sports Trading Life's paint a rosier picture of the situation than is actually the case.  

It seems to me that the auctioneer has a responsibility to ensure a fair auction, and should do his (or her) best to ensure that as far as possible, this is so. If the auditors see the same buyer winning all the better cars, one might expect questions to be asked, and if it is shown that "the auction house has been negligent and as a result you have suffered loss or injury", you may be entitled to compensation.


Peter Scott said...

I do believe you may have misunderstood my point a bit.

You are assuming that everyone is trading in the same style and trying to get the value prices as the markets move with each point. Only the courtsiders will win if that is the case and I agree with that.

However, it is perfectly possible to take positions within a match when you feel the price is wrong or has gone too low/high before the prices correct in-play and be profitable long term.

I am sure this is exactly what you do with your NBA trading so I do not understand why you find it so hard to believe that tennis traders can do the same.

It is also very naive to think that there are not courtsiders in NBA also. Probably not to the same extent as Tennis but it is happening there also.

Perhaps you should explain why you found an edge in NBA but refuse to believe people can find an edge in tennis or other sports?

You said.. "IF" you can spot... That's a big IF. While tennis isn't a sport I care for too much, it seems to be popular with many traders, and it is those people you are competing against. As with trading football, it seems unrealistic to think that you are the best reader of the game out there."

If the above is true then do you think you are the best reader of NBA out there? Do you even have to be the best reader of the game in order to be profitable?

fizzer555 said...

Although we can all make decisions to avoid being on the wrong side of courtsiders on the exchange, clearly they are taking their money from somebody.

The bottom line is that Betfair are failing to meet their own stated objective, summarised in their 'help and learning' section, to PROTECT their customers and enable them to cancel bets when there is a change in market conditions. That's the issue - by putting in a delay Betfair are giving the impression that they have a mechanism in place to prevent you losing money to players who have an advantage over you by having earlier access to information.

Exchange: Why do you have a delay on placing bets on a market that is ‘in-play’?
Updated 21/01/2014 02.47 PM

‘In-play’ Image markets usually carry a time delay varying from 1-9 seconds. This delay is in place to allow customers to cancel unmatched orders on the system when there is a change in market conditions. This delay protects both backers and layers and leads to greater liquidity.