Sunday, February 1, 2009

Classic Aussie open final in prospect?

Currently watching some great tennis this morning at the Aussie open in Melbourne. I'd be happy to hit just one of these shots when I play tennis, let alone on each stroke. It's generating some great trading opportunities as well. Unfortunately I have promised to take the kids swimming so I am likley to miss out.

As an example when Nadal broke Federer in the first set the price moved out a fair bit, but this also left Nadal to serve for the set. He succesfully served out this game. The move took the odds from 1.60 to 2.50 a move of 90 ticks. The logic on this type of trade was pretty easy to understand. If Federer won his game the odds would move in a little. If he lost, Nadal would serve for the set and you would get a significant move.

Over the last few years I have focused more and more on modelling Tennis and finally cracked all the detail last year. This makes it much easier to pinpoint key points when you can look ahead and see the odds and understand where the low risk trades are. But when you think about it, most of the areas are quite obvious. The only disadvantage you have without all the data is you may not understand just how much the odds are likely to move.