India v Australia - Second ODI

Another great game between these two. Aus won the toss and decided to bat. The market was pricing in 275 runs but with some very good batting from Aus and some awful bowling from India, Aus made a massive 359. I got involved in the first innings, which is a rarity for me, in the low 1.2x range. Aus were smashing it about and the market did not seem to want to allow Aus to go below 1.20. It looked a good spot with limited downside or a “free lay” as those on the Betfair forum like to call it. And so it proved.

As well as the limited downside I took the position in the knowledge that the market was still favouring India, not necessarily from a value point of view but from the fact that it was exaggerating price moves in India’s favour. When these situations combine you have a great spot to open a trade. They do not always work out as well as this one did but you can usually at least cover your liabilities.

I was able to take my liability out early in India’s innings and gradually balanced my book as the market moved to evens the pair.

The key in these situations is to leverage your profits as much as possible. Many of you will have heard the phrase “cut your losses and let your profits run”. This can be interpreted in many ways but to me it simply means frame your downside and only take profit when the market offers value. By getting value on opening a trade and getting value on closing you will be well ahead in the long run. It is true that there will be games where no value is available to take profit and in these situations I do not take profit. This can make for a bumpy ride in the short term but this is a long term game.

If you got involved I hope you did ok.

India v Australia – First ODI

I was too late to take a screenshot of the market but there is not much to report from a trading point of view.

The Aussies batted first and posted a good total of 304 with Bailey and Finch producing good knocks. As is often (always!) the case with games involving India – and thanks to Bossman for pointing this out in his comment – the market rarely gave Aus the credit they deserved. Anyone would think that betting was legal in India!

India started off slowly trying to see off the most dangerous of the Aus bowlers and really never got into the chase. The run rate kept climbing and was in the 9s when Dhoni and Jadeja came together. The market was in the mid-1.1x range at the time and knowing the market love for India it was not going to take much to be able to cover liability and hope Dhoni could perform his magic.

I was able to take my liability out but good bowling from Faulkner in particular meant that India could not make use of the batting power play – how often does that happen?! – and that was pretty much that. I ended up with decent green on India and no loss on Aus. Shame there was no chance to start balancing my book.

Incidentally, if you do not follow Bossman’s blog you should do. He provides in running commentary on most games and it is well worth a look. You can find his link on the right.

India v Australia - T20

Great game yesterday. There was no opportunity for me to get involved so in the end I just sat back and watched the exciting finish.

One interesting thing to come out of the game from a trading point of view was the market’s reaction to Australia’s innings. The graph below, taken during change of innings, illustrates the point.

Many of you will be familiar with support and resistance levels and this graph shows how the market would not let Aus’s price go much below 1.5. In fact the price bounced 7 times of this resistance point! This is a common occurrence and something new traders should look out for.

Over the years I have developed a model of prices for T20s. Whilst there are more variables in the second innings, first innings prices are reasonably straight forward to model using the market’s expectancy of runs. This model is useful to identify resistance points and often you can lay the batting side after a good start for little risk.

I will talk more about modelling and support and resistance points in later posts.

India v Australia - T20

Good preview of tomorrow's T20 by Ed Hawkins over at Betfair: http://betting.betfair.com/cricket/20-twenty-cricket/t20-betting-india-v-australia-hosts-should-assert-superiority-over-wobbly-aussies-091013-194.html

Contact Me

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This Week

Cricket pickings are slim this week with just the India v Australia and Afghanistan v Kenya games on the T20 front. The India game starts at a very civilised 2.30 and the Afghanistan game at 4.00. There may be liquidity issues with the Afghanistan match but that should be offset by the fact that most market participants will not be as familiar with the Afghan and Kenyan players so there should be some juicy prices for those in the know. (There’s a tip there if you look hard enough!)

On Sunday the meaningless ODI India v Australia ODI series starts. Michael Clarke has developed a rather politically correct recurrence of his back problems – the BCCI paymasters would not have been happy had he merely been rested before the Ashes – and it will be interesting to see how the Aussies approach it. With little other cricket between now and the first Ashes test those involved will want to push for a place in the test team.

Mumbai Indians v Rajasthan Royals

Needless to say I am happy with that!

Felt comfortable enough to return to my normal trading stakes today and it is pleasing to produce a good result. So often when you look to “up” things the trading Gods decide to give you a kick in the whatsanames. That may still be around the corner of course so I will trade the next game wearing my jock strap and box!

That is probably too much information so on to the game…

The market was pricing a fairly typical 160ish runs and when Mumbai smashed 202/6 and took Perera’s wicket early they were trading in the late 1.1x range. It was an impressive team performance with each batsman contributing but the standout knock was Maxwell with 37 off 14 at a strike rate of 264.

It looked a big task for the Royals but my reading of the pitch is that it was playing well so I took a position on the fall of Perera’s wicket. Fortunately the timing was perfect as a decent stand from Rahane and Sansom spooked the market and it blew out to over 2.5. I was out long before this point though, taking my liability out in the low 1.3x range and levelling up around the 2.0 mark.

The graph of the effect on the market of the partnership is a pleasing sight… assuming you were on the right side of it!

And that was pretty much it for me. When I have a decent win banked I do not like to push things. I did consider opening another position at the same sort of price but the Royals did not have enough batting firepower left in the shed.

Hope you did ok if you got involved.

Trinidad & Tobago v Mumbai Indians

Just a quick update as the final has started. Took a position opposing Mumbai at 1.1x and took the liability out at 1.2x. A good opening stand from Mumbai meant that Trinidad were always chasing the game. 3 wickets in quick succession presented a bounce but unfortunately Trinidad could not make more of it.

Rajasthan Royals v Chennai Super Kings

A decent start after the holiday. It always takes some time to get back the "feel" of the markets after a break but I felt reasonably comfortable.

The market regarded the Royals' 159 as below par and priced Chennai in the low 1.5xs at the change of innings. I thought the price was on the low side given the pitch but not low enough to make me want to open a position.

I eventually opened a couple of positions opposing the Royals in anticipation of some hitting out from Chennai's lower-middle/lower order and got a reasonable bounce but Chennai never really recovered from a poor start.

I was pleased with my decision making so looking forward to the second semi and the final.

Rajasthan Royals v Chennai Super Kings

There is a good summary of this game over at Betfair by Paul Krishnamurty:

http://betting.betfair.com/cricket/20-twenty-cricket/champions-league-t20-betting-rajasthan-royals-vs-chennai-super-kings-041013-171.html

I will not be taking a position pre-match but good luck if you get involved.

Cricket Markets are the Place to Be

Don’t take my word for it, Peter Webb of Bet Angel put up an interesting blog post whilst I was away. You can find it here: http://www.betangel.com/blog_wp/2013/07/10/the-rise-and-rise-of-cricket-trading/

The rise in liquidity in the cricket markets is great news for those that trade it. I know several professional traders that are looking to diversify into cricket because their chosen markets – typically horse racing – do not offer the scalability that they need. Try getting £50,000 on in a weak novice chase at Plumpton!

On a wider point, if you don’t follow Peter’s writings then you should do so if you are serious about becoming a success.

The Wanderer Returns

Wow. That was longer than expected!

One of the great things about trading is the freedom that it gives you to decide what to do and when to do it. The missus completed a project in early summer and had a few months spare so we decided to pack our bags and turned up at our local airport the next day to see which flights had free spaces. We had no idea where we would end up until about 30 minutes before we boarded the plane! We also got a hell of a deal on the price of the tickets.

Our first destination was Spain, we then headed over to Greece and back via Italy. All done on the spur of the moment.

So 3 months later we are back and I am ready to attack the markets again. Looking at the calendar pickings are slim on the cricket front for the next week. I cannot muster much enthusiasm for the Afghanistan v Kenya ODI on Friday nor for the 4.30am start for the Bangladesh v NZ test next Wednesday. Liquidity is likely to be poor along with the quality of the cricket.

My focus is going to be on the Champions League T20 semis and final over the weekend. As always after some time out I will ease my way back in to things and use reduced stakes. Good luck if you get involved.

England v New Zealand

A very volatile market last night and I suspect that there were plenty of big winners but also plenty of big losers. Layers of each side at 1.3ish would have done very nicely as the market swung back and forth from around this mark on a number of occasions.

Unfortunately I was not one of the winners. I typically get involved at lower odds and use the greater leverage lower price points provide. By the time these points were reached it was an NZ train and my stops were hit giving me an all red book of £45ish (I haven’t got into the habit of taking screenshots after games but will try to do so in future). No serious damage and the way the game panned out I was only one boundary from a reasonable win. That may sound like a version of the losing gambler’s oldest refrain but I am comfortable that by staking correctly and leveraging such situations over and over I will be well ahead long term.

Volatile games such as these are often characterised as “trading heaven” but of course they are only trading heaven if you are on the right side of the swings and that is not as easy as some like to make out. I will post something on the subject in the future.

England v India

Interesting markets on yesterday’s England v India game. Sod’s law dictated that I was with the family all weekend so did not get chance to trade it… what an opportunity missed! To make matters worse I was listening to TMS in the car and was unable to capitalise on a spot that would have netted many thousands in profit had I been in front of the computer.
 
The weather meant that the completed match market was all over the place. Those at the ground filled their boots as it swung this way and that. When play eventually resumed the ICC had made it clear that any more rain would mean the game would be called off completely (I’ll ignore the fact that with floodlights play could have gone on until late). So when the rain came after a few overs of play people steamed in to the completed match market. From memory “No” was trading at 1.5x at the time. In a matter of seconds it was down to low 1.0x.

This is where the entry opportunity arrived. TMS announced that the ICC had decided that play could go on to 8.30 pm, notwithstanding what they had said before the play started. On hearing this news the guys in front of their PCs filled their boots. The price quickly blew out to 1.8x. Here is one photo posted on Twitter by Bossman, writer of the megarain blog:

Great work Bossman. Gutted to have missed the opportunity but there will be others.

An interesting postscript to this is that it turns out the ICC match committee had made the decision to extend to 8.30 on Sunday morning but had not announced it! The guys that piled in on “No” when the players went off are no doubt seething.

 

Weather trading is an important adjunct to cricket trading. If you are not adept at both there will be plenty of occasions when you're sat around waiting for the skies to clear and having to listen to Nick Knight!

Twitter

After a fair amount of struggle I have finally managed to add a Twitter gadget to the blog. As with the recommended blogs this feed includes those guys who know what they are talking about so it will hopefully prove useful.

Recommended Blogs

I have added links to the sports trading blogs I read on the right. I have not added just any old blogs. If you are serious about trading I recommend that you read what these guys have to say. They know their stuff.

What is this blog about?

Good question; and not one I really know the answer to at this stage. To be honest it may die on its arse after a few posts but let's see how it goes.

A bit about me. I have a background in derivatives trading and swapped life in the City for life on the betting exchanges a few years ago. No matter what anyone tells you trading principles apply equally across all risk markets whether you are looking at the LIFFE or the match odds market of a game of cricket.

Fear and greed drive all markets. Humans are subject to a number of cognitive biases and heuristics (mental shortcuts) that make trading risk markets an alien concept. It is as a result of these shortcomings that rational, emotion-free traders that take a quantitative approach gain an edge. That is not to say that the quantitative approach is the only way to make money, the legendary Warren Buffet demonstrates as much, but for those of us below the genius IQ level the qualitative approach is very difficult to master.

There are of course differences between the sports and financial markets, the most significant being the interrelationship between prices in sports markets. In these markets, on the betting exchanges at least, the prices will almost invariably result in a near 100% book. This means that if the odds of one selection shorten the odds of one or more of the other selections must drift to maintain the 100% book.

My approach to trading is generally contrarian or "going against the crowd" usually in-play. By doing this at the right times it is possible to take advantage of overreactions (the "fear" and the "greed") in the markets.

I will talk more about each of these subjects in future posts.

Sri Lanka v Australia

A reasonable result. Interesting dynamic to this game as Aus had to reach the target in 29 overs to qualify. They didn't manage it but nearly scraped the win.