NBA Trading

A couple of days ago, John wrote

I watched my first NBA game last night (Bulls v Celtics on ESPN). Seems like it may be a sport I could trade and I'm interested to know how you go about it. Did you have a live stream of those games or do you simply use a live scoreboard? I was watching the odds on Betfair at the same time as the game and although it's fast paced the movements seemed to be slow due to the scoring which makes me think a live feed is not a requirement. Would love to hear your thoughts on this?

For me, the NBA is the best sport for trading. Liquidity in most games is good, there is frequent scoring and the price movements, except for late in close games, tend not to be too extreme. There are plenty of pauses in play when the prices will settle, timeouts, end of quarters, free-throws etc. I have traded blind in the past, i.e. using a live scoreboard, but my personal preference is to find a live feed and get a feel for the game.

I wouldn’t recommend going in too big if you are only just getting into the NBA, but the best way to learn is to play with small sums. The NBA is very much about momentum, but in my opinion, the markets tend to overreact to runs. It’s not unusual to see a team that starts at around 1.7 to take a 10 point first quarter lead and be trading in the 1.3s. 10 point leads are nothing in the NBA – well, not in the first quarter they’re not.

The thing about runs is that they come to an end. Typically a coach will call a timeout when his team is on the wrong end of such a run, the idea being to break the momentum, and re-group, so if you're on the wrong end of a run, it's important to keep a clear head.

Not many games see the favourite head straight to 1.01 and win. It does happen occasionally, but more often than not, the price at some point is driven too low.

A couple of other tips – keep track of the foul count, and who the fouls are on. Players in foul trouble early are usually benched for a while and if the player concerned is one of the ‘stars’, this can be significant. Even when they are back on the court, players in foul trouble, similar to football players on a yellow card, are a little restricted in how aggressive they can be. It’s also important to know when teams are “in the penalty”, and thus when fouls will result in free-throws.

Finally, the last minute of an NBA game can last for a long time. Deliberate fouls, missed free-throws, the three-point option – all these mean that a lead of single digits is not safe even close to the end of a game.