Spot the difference

Can you see the difference in these images? Ok, there are some subtle differences, but not enough to say that one is radically different from the other. Both images were captured around 3 minutes before the start of a race.

I showed these images last night during the webinar. You should note that these images are from Bet Angel on Betfair and Bet Angel on Betdaq respectively. I think it shows you that while liquidity is lower on Betdaq at the moment the markets aren't that different. I am sure liquidity will improve over time but it's quite enocouraging already that the markets have the same shape. This means you should be able to trade both in a pretty similar manner.

Blog is back

At last, after a frustrating few days I am able to return to the blog. For some reason the blog was throwing up an error when trying to put up new posts. After much bouncing around with blogger and various third parties to establish blame it looks like things have resolved themselves. Of course nobody has admited is was them. Anyhow, I look forward to posting again next week.

Bet Angel automated multi market trading

My previous post about the drift of the day made me want to highlight an simple opportunity that you have in Bet Angel. In this video I highlight how to set up trailing stops to catch a price in either direction. On this occasion we catch a drift and it is all traded automaticially in the background . This is because we added the market to Bet Angel's guardian tool. We only used a small £50 stake but made £7.20, a near 15% return fully greened up. If you would have used normal stakes to a £1 tick size you would have earned £72 on this trade.

Click here to view the video

Drift of the day

I've been on a great run this month. I think I could possibly be headed for my highest ever strike rate. I would normally say this is great news but with the new 'You are in the top 0.5% of customers premium charge' I am going to pay a fair bit for this winning run. Betfair's coffers would only be bloated a little by this race as I made a bit of a hash of it only managed to get £42 out of this signficant drift. I say only because the move was pretty much 150% of your stake and fully greened up £42 is a terrible result for a move of that kind. Obviously on this occasion I didn't do a good job, but looking at the chart you can see that it came back in several times before finishing the drift. This time I was too trigger happy it seems.

The goal that wasn't

Does this look like a goal to you? Well to the linesman, sorry, assistant referee saw one and in one of the most bizarre incidients I have ever seen, a goal was awarded to Reading who subsequently took a 1-0 lead against Watford. The match ended 2-2.

I've never understood why, when there is so much at stake, that they don't appoint video referees as this would have solved a lot of problems in the past. One problem I can see is that the authorities feel the game wouldn't be the same as the one represented at grassroots level. If you look at other sports though, this hasn't been a problem. Surely with the millions being spent in the sport a fourth official shouldn't be a problem? As it is, the match has no chance of being replayed because that would surely create many problems with other such disputes in the future. You have to feel sorry for the officials in this case, an obvious howler.

Almost millions, again!!

Over the years I've managed to achieve a number of things that people would consider utterly remarkably. The odds on achieving just some of things I've done are off the measureable scale. However, I've always maintained that none of them is that remarkable, as, in my opinion, luck is where opportunity meets ability. I don't think that will ever change.

One thing that has evaded me though is a big lottery win! For good reason, the lottery is all about pure luck. There is nothing I can do, apart from some basics, to influence how those numbers fall. I keep coming frustratingly close though!

On Saturday, for the second time in eights months, I was just one ball away from the jackpot on the national lottery. Twice now I have seen all five of the first five balls drop into place, only for the sixth to deny me. As a result, one person won £4.5m on Saturday, I am sure they could have shared that?

I take solace however that somewhere in a parallel dimension another Peter just saw that sixth ball drop into place, after all it was only a one in 43 chance, again!

Ryder cup update

Well it's a tight contest and which will go to the last day and it could go either way, though the US have the edge. Is it my imagination or are they more focused without Tiger Woods?

Currently the tie is trading exactly in the expected range so today sets us up for a decent swing. It has to end on 1000 or 1.01, hopefully we will get an early advantage to Europe and that would make the price very tradeable. If the US get some early gains it will make it less attractive. By laying the tie at shorter odds you can set up a low risk high potential trade. Good luck whatever you do.

Who will will the Ryder cup?

That's easy, it could be the US or Europe. But seriously, this is a tricky one to work out. Also , you have the tie. That is where my attention is focused.

In all time or points limited events you will always find a lot more volatility towards the end of the event than at the start, so the first point is that I will only start taking a real interest in the Ryder Cup as it develops. Any early gain or loss will move prices but not significantly, unless there is a whitewash of course. It would be great to make a call on how either team will play but golf is such a tight game, where an errant swing can cost you dearly, that the only sure thing as we head through the tournament, is that a dropped shot is likely to be critical at some point.

Of course with a 'three runner field' picking the winner in such a tight contest is difficult, trading the tie has to be a good option. Also trading the tie towards the end of the event is where you are most likely to find the most profitable and least risky proposition. By laying it you are saying that either team will win. As there have only been two ties since 1927 that looks a good choice. I'm not saying lay the draw now, but when the match is underway and nearer it's concluesion, if it is a tight contest, one mistake will make the draw shoot right out.

Predictably irrational

Thinking is work also, don't let anybody tell you anything different. Of course, I say this because I do a lot of thinking! Most of this is spawned by stuff that I read. I am currently reading: -

http://www.predictablyirrational.com/

I have a number of similar books and the reason is for that is that the psychology of people directly influences markets. It was how I won the football pools, what shaped my investing criteria in the stock market and I use the same in my activity in gambling markets. People do strange things for strange reasons and any insight I can get into that is always going to be useful.

I think the recent Betfair premium charges may be a case in point. When you remove or amend an incentive people adapt. As Betfair have targetted, in their words, very particular types of customers; those customer will respond. They have to either mitigate the effects of the charge or make more to offset it. Both those activities will prove disruptive to Betfair IMHO.

Anyhow, This book isn't light reading but its very interesting and as such I recommend it as a good read.

Financial market chaos

Slightly off topic but I thought this may interest readers.

Nobody could have missed the turmoil in the financial markets recently. I've noted that most commentators have explained why, not how. Around 18 months ago, before the chaotic period we have now entered, I wrote an article about banks and my concerns with them. This should give you a bit of background and also impress friends with your knowledge of the evolution of the banking system!

View the pdf of the article by clicking on this text

Why not paying costs you money

I learnt the hard way that if, in life, you always go for the cheapest option you never do as well as if you invest in something better. That sounds obvious but people find this difficult and very often skip corners. It is often the difference between success and failure. As a consequence I have always allocated funds to invest in whatever I do, purely to try and get myself to the next level. I'd rather buy something and write it off, than put off buying it to save a bit of money. Let me give you an example.

As you may be aware it is possible to trade sports events without TV pictures. In fact some sites make that a key attraction / selling point of trading; which to some extent it is. However, using all available information available to you, subject to some caveats, often makes sense. I think it also adds a human element to your activity. That's great as long as you have your emotions in control.

I've been meaning to publish this example for a while as it clearly highlights the benefit not only of human intuition, but also why not paying extra for better TV pictures is a bit of a false economy. In the following graph you can see that this selection, in a horse race, was trading just fine then suddenly the price rocketed up without warning. Anybody scalping this would have had a huge shock!!!!

I use the words "without warning" in a slightly underhanded manner as some of us knew exactly what was going on and profited from it.

Kempton Park is covered on Sky channel 432 and to subscribe you need to pay the mighty sum of £13 per month. This evening I was watching the build up to the race when it became obvious that a jockey was struggling to control his mount. As his ride stepped onto the course it suddenly decided the race had started and bolted off like a rocket.

My finger was already hovering over the lay button and the instant the horse bolted I knew the door of opportunity was open. The horse bolted right to the start and at one point looked like he was headed straight on for the stalls. Fortunately the jockey managed to bring his ride under control and the panic was over. The odds still continued to drift as the horse was obviously out of sorts. Without pictures I could not have seen or anticipated any of what had happened.

This is just one of countless benefits of being able to see what is happening on course. For the sake of £13 per month I paid for a years subscription in just a few minutes. Without seeing the developing situation I may have ended up with a nasty loss, instead I achieved completely the opposite. A sensible investment, I am sure you will agree.

Commission Impossible

I saw this excellent post by "armida" today which just about sums up the issue Betfair are going to face going forward. Trying to recruit punters to Betfair's new exchange model is going to prove no mean feat. By constrast, simpler mechanisms are much easier to understand. If Betfair are going to introduce this new model to attract more customers, I think they have a problem.

----------

SEPTEMBER 2001

Joe Punter: Twenty tenners please.

Betfair Bob: You would be better off putting that on Betfair rather than this betting shop, It could be as much as 40 on there, less 5% comm, gives you over 37/1.

Joe Punter: Really? I will have a look at that.

SEPTEMBER 2008

Joe Punter: Twenty tenners please.

Betfair Bob: You would be better off putting that on Betfair, it could be as much as 40 on there, less your commission, which is your net winnings multiplied by the Market Base Rate, after your Discount Rate is converted from your Betfair Points Total, and applied to the Market Base Rate, unless of course, you have taken a Betfair Holiday, when your Betfair Points will not be credited, so your Discount Rate will remain the same, but you won't be subject to a 15% decay in your Points Total at the end of the week.

However, if you win you may qualify for the Premium Charge of up to 22.5% which is dependant on your forthcoming weekly profit in relation to the commission payable for that week or on a rolling 60 week average, which is when your commission and implied commission is calculated and divided by two, which is ok because it can be offset against the £1000 Premium Charge allowance, and at the end of the week you find out what price you got.

Joe Punter: Twenty tenners please.

Croatia 1 England 4

Well that was a surprise wasn't it? I looked long and hard at this match and couldn't really decide if I should adopt any tactic.My take was the following.

Croatia had never been beaten at home and England had just stumbled to a poor win against Andorra. The market seemed to have priced that in already. Also I like going against the grain and most people would have written of an England win so that wasn't a terrible option at the right price. However, looking at the market, a draw was being priced in. The market was discounting just over 2.20 goals. At this level the chance of a draw rises quite considerably. With a patriotic stance bearing on my shoulders I decided not to do anything particular risky and felt this was one to watch.

An expectancy of 2.20 goals is actually pretty low, in fact if you look at all games only around 8-10% would have fewer goals priced in. Taking into account the nature of the match you would expect this particular match to be a few percent up on that; even so a very low number. How fun then that there were five in total!!!! Such is the nature of football that this happens now and again.

So is this the new dawn of English football? Looking at the following stats you would have to say NO. When you dig under the match stats there is no doubt England deserved the win but the emphatic nature is a little flattering. So a new dawn is a premature call in this case, though the confidence boost England have got will bear them well for their next match. Pricing in a higher level of ability on the scoreline, would definitely be an error.

Laytown

Sounds like a small town where people favour only one side of the book. But in fact its a racecourse in Ireland.

I don't know why, but this race course captivates me each year. I think when I am better organised and have more time on my hands, I might go and visit the course for the racing one day. It's obviously something to do with the sea, sand and the s..............starting post that draws me to the venue. If I don't get the chance to go next year I may offer up a place for anybody that would like to go and write up their experiance. I'd love to know what it's like to go there.

While I'm here the first day of the Leger meeting went OK, but nothing spectacular. The furore around the new Betfair charges continue, as does our work behind the scences. Rather than clutter the blog up I'll try and stick to more positive themes here. Thanks for all the email's I've recieved and you are definately assured of my attention. It's obviously going to be a major cost for me and a lot of Bet Angel users. Once again, at least we can be flattered that we are better than 99.5% of worldwide exchange users, well according to Betfair that is.

St Leger

The St Leger is the last big classic of the flat season. I am hoping for a trouble free week and reasonable weather. With the going soft to heavy I expect quite a few non runners and that, along with the weather, could make the St Leger meeting a little trickier to trade.

The St Leger is one of the oldest classic races. The first race was held over on Cantley Common, two miles east of the current racecourse, on 24 September 1776. The event was organized by Charles Watson-Wentworth, 2nd Marquess of Rockingham (a prominent politician and former Prime Minister) and was the idea of Lieutenant Colonel Anthony St. Leger (a former MP). On the day, the winning horse (from a field of five) was owned by Rockingham, with a horse owned by St. Leger following in second. In 1779, the race moved from Cantley to a new course on the Town Moor, where it remains to this day.

Betfair's biggest gamble

Having been on Betfair since it started I've watched Betfair grow from a baby into a sprawling corporate beast.

Back in the early days of Betfair, not much happened and it was only the arrival of liquidity that attracted the big betting whales to the markets, with both those things in place a virtuous cycle began. Volume created volume and Betfair grew and grew. Based on the original structure of Betfair, during my public talks I positioned them as a new kind of risk market and one that could conceivably dominate traditional risk exchanges. It looks like that cycle and the concept has now been broken.

A fully functioning market is more akin to an ecosystem and requires many types of users. Up and down the food chain there is a complex interaction of types. All participants, whether they accept it or not, are interdependent on each other. Break that chain anywhere and you immediately have problems for everybody.

I've been told directly by Betfair that they have carefully worked out who will be affected. They may have worked out who will be affected by the charge but I am not convinced they have worked out the wider impact on the ecosystem they created. Changes may not happen instantly but I am certain that, given such a shock to the system, the market will change. People who lose up to 22.5% of their profits are not going to sit idle. One of the benefits Bet Angel users have is that I will hurt as much as anybody, so we have many incentives not to sit idle.

On a wider point, the mere fact that Betfair have changed tack will ensure that more trust is lost with customers. This means people will change behaviour regardless of whether any particular customer is affected directly or not.

In the short term and while other moves are afoot, lets look on the bright side. If you are affected by the change then you are doing incredibly well. Judging by my inbox Bet Angel users are doing incredibly well. Well done.

Overall my view is that, quite appropriately for a gambling company, Betfair have taken an absolutely massive gamble.

Murray vs Federer - US Open final

Urghh, not another late night. I can't cope with many more early mornings and late nights. I also ache because I have started at a new Gym. More about that some other time.

A few years ago I started work on a Tennis model. I finished it last year and used it at the Australian open. It works in a similar way to Soccer Mystic allowing you to look ahead and see how things will affect the odds. It's useful to understand what risk you are taking before you take it.

I may not get these spot on as I don't know who is serving first etc. but given the current market prices if Federer wins the opening game I expect the odds to drop to 1.49, if Murray does they will go out to 1.77. There is around a 75% chance of Murray winning a game on service and an 80% chance of Federer doing the same. If Federer wins the first set his odds will jump to around 1.25, if Murray does, Federer drifts to 2.25.

These stats are a little subjective before the off as you don't know if both with conform to the underlying form. I suspect Federer is the more nervous of the two and Murray has little to lose. Should be a great match!

Betfair want 20% of your profits!

Just received the email confirmation that I will be subject to the new 'premium' charge. Hey guys thanks for the warning, after eight years on Betfair and having paid a lot in commission in that time I would have thought a call would have been nice. In the email it states that it will affect only 0.50% of Betfair. However, given that traders contribute so much volume to the market I would have thought it would affect a huge amount of customers. Betfair even produced some analysis of their own a little while ago on how the market is made up and I would think that this new 20% charge would affect the majority of active users.

To find out more about these charges visit the Betfair home page, click on about us and charges.

New Betfair charges due?

Rumours are sweeping around that Betfair are about to substantially increase their commission rake from the market. If true, this would hand Betfair's competition a massive boost. We have already taken steps to see what we can do help our customers based on these rumours, but obviously we need to see official confirmation first. Betfair haven't said a thing to us or any of our bigger customers so it's not impossible the rumours are false in some aspects, but I await with interest to see what the situation is. Generally there is no smoke without fire.

Breaks in play

Tropical storm Hanna has put paid to the US Open semi final now, I doubt whether it will get going again soon. Unfortunately for Murray breaks in play generally help the current loser in a match, whatever that match or sport is. With the storm forecast to be pretty severe it will be a big test of Murray's focus. If I am around, when the match starts up again, I'll look for how either participant responds to the break.

Time to close out on Murray semi final

Well done if you laid Nadal at the start of the US Open semi final you would have seen his price drift from 1.30's to 2.00 when the second set went to a tie break. For me that's enough action at the moment. There will be a big move in favour of whoever wins the tie break, especially if its Nadal, so that's a good time to take profit. I hope Murray goes on to win this set but it's a clean result if you already laid Nadal, so I'll take that. You can also leave a bit extra on Murray but Nadal is so strong and the crowd is favouring him, so I have some doubts.

Why England could be like Wales

When England step out to play Andorra we could be in for a repeat of the Wales match earlier in the day, why? Both teams are expected to beat much weaker opposition, but both teams often struggle to break down their opposition and live up to the ranking gap between them. How does that affect the market? For that I can illustrate using Soccer Mystic.

This is the chart for the match odds, click on it to enlarge it. You can see that the odds on England start very high, near 100% probability. But if they fail to score their price will drift dramatically. That drift really accelerates in the second half. The price on the draw comes in quickly but the price on Andorra won't really move much. Look at the Wales charts from today.

If you are nervous with the match odds market you could switch to the over and unders market. Following this text is the Soccer Mystic prediction for the over/unders. You can see that by using the cross hairs I can work out the starting price of overs at around 1.25. I can click again where the two lines cross and see that 50/50 is reached at around 34/35 minutes, that's a 75 tick move! You would expect England to crush Andorra but any failure to score early will see a significant change in price. Laying unders looks appealing and if England look promising you can always close out for a loss on unders as less than three goals in the match would be a massive embarrassment for England.

The really useful thing about Soccer Mystic is that it can model any match. Each match is unique, don't let anybody tell you anything different. Therefore a one fits all strategy generally doesn't work and knowing where the odds will move, when and how, is always going to be a hugely beneficial thing to know.

More than just horse racing

As the racing has been wiped out maybe it's time for you to have a look at some other sports. England vs Andorra shouldn't be difficult to pick a winner but Murray vs Nadal in the US Open semi could be a little tricker. Nadal is totally on fire at the moment but Murray's confidence is very high and if he gets off to a confident start against Nadal, Nadal's price could come off a fair bit before Nadal imposes his authority. The weather could work against Murray but hopefully he has done a lot of work on that. It should be an interesting match.

As you may already know I will happily add a points to a sport person whose confidence is rising so with two players in the zone it should be a cracker.

Making the best of a difficult day

Another rain affected day passes into the spreadsheet, its been getting a bit too common this year. Tomorrow is also looking a pretty awful prospect. I seriously doubt that Haydock will go ahead and if it does, I can see a fair amount of uncertainty as to who will run and how the remaining horses and jockeys will feel after the first race. Personally I would be very surprised to see it go ahead.

The upshot will be that tomorrows card could be decimated, as was today's card. Depending on what goes ahead, or not, should drive you to decide whether you get this Saturday off. I am contemplating missing the day if things look bleak. That said, I had second thoughts this evening as despite almost deciding to throw the towel in on Fridays action; I did manage to get something out of the day. This was despite almost missing a few races, being cautious by using lower stakes and also not being able to see pictures a lot of time (thanks to local heavy rain clouds). So here's hoping that tomorrow brings better opportunities. Best of luck, whatever you decide to do.

St Leger under threat?

Just when I thought we were clear of the terrible weather, it looks like it has come back to haunt us again and we have lost a few races this week. The Saturday racing looks somewhat under threat as well.

I have my eye on the bigger picture though. If you keep an eye on the weather systems on the east coast of the US they tend to move up and over the Atlantic towards us. At the moment tropical storm Hanna is dumping copious amounts of rain over there. Looking at the five day track for the storm it is headed right for us. This could present a threat for the St Leger, I really hope not, lets keep our fingers crossed.

Here is a link so you can keep an eye on things: -

http://www.nhc.noaa.gov/

Robbed!

Hmm, 20:20 at Great Leighs tonight, another race that Betfair failed to turn in play. However that didn't matter as I was out before the start of this one. Or so I thought.

You can imagine my surprise when they deem that the off time was before my final closing position. It definitely wasn't as I saw the horses jump and I was annoyed I had made a small loss after a good day. That turned that small loss into a whopping great big one! I am not a happy bunny. I can't see why they deemed the off time as the official off time rather than the usual Betfair off, which is usually around 5-8 seconds later. They don't seem to care about market manipulation of SP during this period but seem to have applied a different rule here which has no doubt shafted a lot of their bigger customers. All I ask for is consistency, I can live with that. whether it benefits me or goes against me. For most of this year however, all I have seen is inconsistent rules applied. That's not acceptable.

Interesting Betfair advice!

Had a little giggle this afternoon when I saw this headline banner on the Betfair website. Obviously the creator was running out of ideas and came up with a classic. Backing or laying every horse in the race isn't exactly a great idea but if you want to try it, don't let me stop you from trying.

Manager mayhem

I don't know how to price the chance of somebody leaving their job or even being appointed to a new one. I do know that if you lay two selections at least at odds on, you will make money. With this in mind you may want to look at the next manager or related markets which always seem to throw up significant opportunities.

This week saw Kevin Keegan resign from Newcastle Football Club, or at least we thought he did. It then appears that Alan Curbishley beat him to be the 'winner' of the managerial change market on Betfair when he quit West Ham. Betfair have the market on hold while they try to work out who did or didn't quit first. Both traded below 1.05.

Get out of jail!

Low backers had a mighty lucky escape the other day. Despite going off at an SP of 1.23, Jamie Spencers mount 'Time Control' completely failed to make his time or keep control of the race. Beaten in a close finish it took a stewards enquiry to overturn the winner and award the race to the low backers. I bet there were a few changes in strategy after that result!! The result didn't really matter to me as it was not my type of race but this was one of several short odds to be turned over recently.

Now thats what I can a spoof!

(Click on the image to make it bigger) I am familiar with seeing money appear on either side of the book. I generally don't get phased at all by money appearing and vanishing again. It doesn't worry me and if you read the market well, it shouldn't worry you. Spoofing doesn't touch or influence anything I do. But this one did surprise me so I grabbed a quick screen shot for you. It's not often you see somebody trying to back 19's with £10,000. Unfortunately for this person there was only £25 in front of the next price. So for a laugh I thought I would try and take a chunk at this price, the money soon vanished again!

Murray opportunity

Good trading opportunity this evening in the US Open where Andy Murray meets Del Portro in which by all accounts is a bit of a grudge match. I am fairly confident you could lay the early leader for a half decent swing of odds in play. After two late nights out I'll be trying to stay sharp for this match to see if I can get something out of it. Murray has the momentum at the moment it should be an interesting match.

Watch out card counters!!

Wesley Cooper, a Ph.D. student, has designed a surveillance system that is able to point out black jack players who are card counting. The system uses a video camera along with statistical analysis to profile players and spot game play irregularities.

“Blackjack is beatable if you have a good math brain,” Mr. Cooper told the paper. “At the moment, casino surveillance staff have to watch the tables and try to identify suspicious play using their experience and instincts. This system does the same job automatically using computer-vision techniques and algorithms.”